• Marie Callender and Perkins Restaurant Chain File Chapter 11 Bankruptcy

    The owner of Perkins and Marie Callender restaurant chains filed for bankruptcy on June 13, 2011. Court documents show that the company plans to shutter 65 of its 600 locations and eliminate 2,500 jobs.

    The bankruptcy is wiping out the investment of private equity firm Castle Harlan. They acquired the Perkins chain in 2005 for $245 million. Castle Harlan added the Marie Callender Restaurant and Bakery chain in 2006 for $140 million.

    The restaurant chain is the latest food business to fall in a sluggish economy and soaring food prices. Perkins and MarieCallender Inc.’s filing follows on the heels of a bankruptcy filed by chicken producer Allen Family Foods.

    Company President Joseph Trungale said in court documents that the company was hit hard by a weak economy. A sharp decline in restaurant sales in the Midwest, Florida and California pushed the company into filing.

    The company said that high unemployment and foreclosure rates in Florida and California led to a decrease in discretionary income for many historically loyal customer, resulting in a drop in customer traffic.

    Total assets for the company listed in the petition are $290 million with liabilities of $440.8 million. Eleven affiliates of Perkins and Marie Callender’s, Inc. are included in the bankruptcy filing.

    If you are seeking bankruptcy information , contact a Chicago bankruptcy attorney for insight into how the process works.

  • Founder of Failed New Century Bank Faces Foreclosure on Personal Condo

    Faye T. Pantazelos, founder of New Century Bank, has failed to make payments on her condominium loan since December 2010. There is no mention of her seeking foreclosure help or a short sale. Her bank failed last year as a result of heavy investment in the failing real estate market.

    U.S. Bank filed a complaint in Cook County Circuit Court on May 17, 2011 stating that Pantazelos has failed to make payments on a $744,000 loan. According to the complaint, the principal balance of the loan is $712,199.66.

    Ms. Pantazelos purchased the condominium located in the Gold Coast for $930,000 in August 2007. Before founding New Century Bank in 1999, she worked at First Chicago NBD Corp. and Bank of Ravenswood. New Century Bank primarily issued loans for commercial real estate projects. Regulators closed the bank in April 2010 and sold it to MB Financial Bank after the real estate crash affected many of New Century’s developer clients. The bank’s assets totaled $486 million at the end of 2009.

    New Century lent to the construction and development market even when it became apparent that it was going to fail.

    Michael Iannaccone, president at MDI Investments Inc. said, “It was like a game of musical chairs; people knew the music was going to stop. We went from one chair being removed at a time to two, three, four chairs being removed, but they kept on lending. You knew that someone was going to be left holding the bag.”

    If you are in a possible foreclosure situation, and would prefer to explore your options for short sale or other choices, contact a Chicago short sale attorney for more information.

  • Battle for Control of Rookwood Pottery Takes a Surprising Turn

    Rookwood Corporation filed an involuntary chapter 11 bankruptcy in May, 2011, forced into filing by their creditors. Shareholders voted on June 21, 2011 for a change in leadership and restore former company president and CEO Chris Rose as a director.

    Current CEO Chip DeMois laughed when he was asked to comment on a news release which states that he has been removed from his position by shareholders.

    DeMois said he is still at Rookwood and the current team is “firing on all cylinders and continuing to move forward.”

    Rookwood Pottery is experiencing growth, having increased the amount of employees by 50 percent since January. It has recently received its first international order and increased the production capacity by 200 percent. Rookwood saw its first profit in May, 2011, the first in many years.

    Majority owners Martin and Marilyn Wade tried to avoid filing for bankruptcy by planning an auction of the company’s assets. They hoped to reorganize under a new corporate structure. However, creditors Alfred Berger Jr., Sharri Ramelsberg and Rose forced the involuntary bankruptcy. They say they are owed almost $260,000 in total.

    The Wades fired Rose in December, 2010 and hired DeMois in January, 2011.

    If you are considering filing for bankrupty and would like to obtain bankruptcy information, about the process, contact a Chicago bankruptcy attorney.

  • Spiderman Sued by Bankruptcy Trustee for Poker Winnings

    Bankruptcy trustee Howard Ehrenberg is suing Tobey Maguire, star of “Spiderman,” in a claw back effort to reclaim more than $300,000.

    Ehrenberg is the trustee in the bankruptcy case of Bradley Ruderman. Ruderman is currently in prison for stealing $25 million from investors in his Ponzi scheme, fronted by a hedge fund that he managed.

    Ruderman played high stakes games of Texas Hold ‘Em poker with Maguire and lost big. The games were played in Southern California hotels between 2006 and 2009.

    Checks written to Maguire for covering poker losses total $311,200.

    Funds invested in Ruderman’s Capital were transferred to Maguire for payment. Maguire was unaware that investors victimized by Ruderman funded his winnings. The trustee said that the money still needs to be repaid.

    “It is a technical legal argument – if you are involved in an illegal activity, you don’t get that defense of ignorance,” Ehrenberg said. “The game he played in itself was illegal. That’s the linkage, the money was paid directly from Ruderman Capital.”

    Games played in private homes for stakes are not illegal in California. However, the suit alleges that the games that Ruderman and Maguire played were against the law because a paid event planner organized everything.

    If you are looking into the possibility of filing in bankruptcy court , contact a Chicago bankruptcy attorney for more information about the process.

     

  • Bankruptcy Judge Authorizes Sale of Aston Martin Owned by Peter Madoff

    A 1958 Aston Martin once owned by Peter Madoff, brother of Bernard Madoff, is to be sold at auction to help pay former investors who suffered losses from the brother’s Ponzi schemes.

    The trustee liquidating Bernard Madoff’s firm in New York won permission from U.S. Bankruptcy Judge Burton Lifland to sell the car. Bernard Madoff’s U.K. firm bought the 1958 Aston Marton MK III Drophead Coupe for his brother in 2008 for $267,000. According to trustee Irving Picard, Peter Madoff never reimbursed the firm for the purchase.

    RM Auctions is selling the Drophead Coupe at auction in California in August 2011.  The company sold a similar car for $330,000 in 2011.

    Liquidators of Madoff’s U.K. firm sued Peter Madoff in 2009 for allegedly enriching himself unjustly by taking the Aston Martin. The liquidators transferred ownership of the car to the trustee on May 4, 2011.

    Trustee Irving Picard sought a total of $198.7 million from Peter Madoff and other members of Bernard Madoff’s family. To date, he has recovered about $7.6 billion for investors who lost more than $17 billion in Madoff’s schemes. Most of the money is not available for distribution as of this time.

    If you are looking into filing for bankruptcy and would like to learn more about the process, contact a Chicago bankruptcy attorney for more information.

  • Bankruptcy Judge Declares Defense of Marriage Act Unconstitutional

    A bankruptcy judge for the Central District of California declared DOMA unconstitutional in a ruling on June 13, 2011. 19 other bankruptcy judges in the district signed the ruling in consensus.

    The case began when a gay couple in California filed for chapter 13 bankruptcy protection as a married couple. The U.S. Trustee’s Office asked Judge Donovan to dismiss the case on the grounds that DOMA barred the court from recognizing the couple’s marriage.

    Judge Donovan declined to dismiss the case, stating in his judgment that “no legally married couple should be entitled to fewer bankruptcy rights than any other legally married couple.” He also wrote that the couple “demonstrated that there is no valid governmental basis for DOMA. In the end, the court finds that DOMA violates the equal protection rights of the debtors as recognized under the due process clause of the Fifth Amendment.”

    Justice Department spokeswoman Tracy Schmaler said the government would have no comment on the ruling or potential next steps by the department.

    Robert Pfister, the attorney who represented the gay couple in bankruptcy court, expects an appeal of the ruling to be filed by the trustee on behalf of members of Congress who want the law to remain in force.

    If you are interested in filing for bankruptcy and would like to learn more about the process works, contact a Chicago bankruptcy attorney for more information.

  • Illinois Bankruptcy Court Facing Eviction from Will County Courts

    The Northern District of Illinois Bankruptcy Court is looking at possible eviction from their courtrooms in Joliet. Will County has seen an increase in court cases because of population growth, and now needs more space.

    An extension on an existing lease is due to expire soon, and Will County Judge Gerald Kinney said he needs the courtroom to accommodate his own crowded court system.

    Kenneth Gardner, clerk of the bankruptcy court, said that the courtroom has been in its current location since the 1990s, before Will County bought the building. He said 7,548 cases were filed there in 2010, originating in Grundy, Kendall, LaSalle, and Will counties. It was the court’s busiest year since 2005.

    Kinney told county board members the bankruptcy court cases could wind up in Chicago, but Gardner said it would seek a new courtroom in the area to keep them local. “Our intent, for sure, is to stay there,” Gardner said.

    Kinney said Will County’s main courthouse is crowded and fails to meet security standards set by the Illinois Supreme Court. The county is expecting to receive five new judges in 2012 because of its population growth.

    Kinney said he’d work with the bankruptcy court to give them time to find a new location.

    If you are considering filing for bankruptcy and have questions about the process, contact a Chicago bankruptcy attorney for more information.

  • Owner of Giordano’s Pizza Makes Strange Decisions during Bankruptcy

    Giordano’s owner, John Apostolou, has made inexplicable decisions during the chapter 11 bankruptcy of his pizza chain. His actions have caused the court to bar him from his restaurants and hire an investment banker to sell the chain.

    Apostolou’s lawyer admits that his client made mistakes, causing Apostolou to lose control of the business during the bankruptcy . The biggest mistakes made are unusual documents Apostolou filed in court in which he improperly tries to terminate the bankruptcy, alleging fraud and other misdeeds. Included in the documents is an affidavit signed by his wife, Eva, in which they claim they do not recognize U.S. currency and are free of any legal constraints.

    Apostolou also fired Giordano’s bankruptcy attorney. This action caused the U.S. Justice Department to ask the bankruptcy court to appoint a trustee to seize the business.

    Trustee Philip Martino stated in a court hearing “because of certain perspectives that the Apostolou’s have, they have done a few things that merit this court’s attention. Perhaps it contributed to the lack of confidence that creditors have and certainly were part of the reason why I wanted them removed as fiduciaries.”

    Martino also said in court that he asked the Apostolous not to patronize Giordano’s because he thought their presence could be disruptive.

    If you are considering filing for bankruptcy and would like to learn more about the process, contact a Chicago bankruptcy attorney for more information.

  • Vacant Lots Owned by Gas City to be Auctioned by Bankruptcy Court

    Gas City, LTD is putting five vacant properties up for auction in June 2011. The company filed for Chapter 11 bankruptcy protection in October of 2010.

    The properties going for auction range in size from three acres to more than 46 acres. They are located in Will County, Ill and Montgomery County, Ind.

    Bids are due Wednesday, June 22, and the auction is scheduled for 10:00 a.m. on Friday, June 24.

    The auction is part of the ongoing breakup of Gas City. The company cited more than 1,000 creditors and estimated liabilities of more than $100 million in its bankruptcy filing. Published reports say that the debt totals $365 million.

    The company’s 50 retail sites were auctioned to the highest qualified bidders in April of 2011 for a total of approximately $135 million. According to bankruptcy court records, some of the purchasers are Speedway, TravelCenters of America, 7-Eleven, Inc., and Valero Retail Holdings, Inc.

    Before filing for bankruptcy protection, Gas City was a family-owned and -operated petroleum marketer and convenience store chain with 50 locations located around the United States. Gas City was founded in 1966 with one convenience store by current president William J. McEnery.

    If you are considering filing for bankruptcy and would like to learn more about the process, contact a Chicago bankruptcy attorney for more information.

  • Minnesota Auto Dealership Mogul Claims Bad Bankruptcy Advice put Him in Prison

    It has been two years since Denny Hecker filed for personal chapter 7 bankruptcy. Hecker says he filed because his lawyers told him it was the only way to get the “gorilla” off his back. The “gorilla” in question is creditor Chrysler Financial. Hecker owed the financial arm of the automaker $767 million, and lesser amounts to other creditors.

    Hecker states that his gut told him not to file, but he succumbed to pressure from long-time trusted friends, employees with a vested interest in the company, and his spouse at the time. Lawyers told him that he could shed his debt to his creditors, and Hecker figured he could maintain his family’s lifestyle by running his remaining businesses.

    The bankruptcy started going wrong when the trustee handling the bankruptcy case started to ask questions. Complicating the case was the sale of two dealerships that were not finalized when the bankruptcy was filed. Trustee Randy Seaver raised questions about turning over the funds from the sales to pay other creditors.  The situation worsened when people who knew Hecker started calling in tips about hidden assets to Seaver.

    Hecker claims that he was a victim who was “outmaneuvered” by a raft of lawyers, including an “aggressive” bankruptcy trustee and his own lawyer.

    Federal prosecutors and Seaver stated that “Hecker committed bankruptcy fraud, repeatedly lied and chose to put his own financial interests above all else, including the rule of law and our system of justice.”

    Prosecutors charged Hecker with bankruptcy and wire fraud. Hecker plead guilty and received a prison sentence of up to ten years.