• With skyrocketing debt, Chicago hotel files bankruptcy

    Another Chicago based hotel has filed for bankruptcy protection.  Yet despite the unfortunate but all too common news, the owners of the property stand committed to remain open and conduct normal business during the tedious process.

    ALT Hotel LLC, the owners of the once profitable hotel, claims to have approximately 100 to 200 creditors. The debt of the venture is staggering which is expected to have reached approximately $50 million to $100 million. The debt equals or exceeds the new worth of the parent company which has assets ranging from $100 million to $500 million.  In these times, many Chicago bankruptcy attorneys are used to seeing debt exceed assets.

    Though once certain the hotel would avoid bankruptcy, the owners now argue that the bold actions of single creditor has threatened the hotel’s future, causing no the owners no choice but to file. The list of creditors is extensive and includes Wells Fargo, Diamond Rock Hospitality, and Diamond Rock Allerton Owner LLC.  The hotel owners expect these debtors to file lawsuits.

    A spokesperson for the hotel claims the hotel will emerge stronger then ever.

    “We are very proud of the significant improvements in hotel operations and performance in the few months since we assumed ownership.  We have met all our obligations, and enjoy strong positive cash flows.”

    The list of secured creditors was not cited in the bankruptcy filing.

  • Illinois legislators take aim at powerful debt collection industry

    Illinois General Assembly continues to mull over legislation that would change how the state’s repossession agents operate.  Illinois bankruptcy and repossession lawyers , consumer right advocates, and other professionals connected to the debt collection industry view the law as a positive sign toward protecting individuals from collectors.

    Illinois Senate bill No. 1306-the Collateral Recovery Act-has made it to the House’s Judiciary Civil Law Committee.  The bill will probably be modified by the Committee.

    The Act would significantly change state law.  If passed, it would require licensing of repossession agencies and recovery managers as well as repossession agency employees. The law would contain certain provisions addressing qualifications, application, examination, assignment, insurance requirements and administrative proceedings of the recovery companies.

    The bill was recently amended to become enforceable on July 1, 2012.

    The law also requires repossession agents to buy permit tickets for each potential recovery. The cost of tickets will be $10.  The bill makes it a crime to not purchase a ticket.

    Concerning enforcement of the law, legislatures will grant the Illinois Commerce Commission jurisdiction over industry disciplinary action and the licensing of managers, companies, and agents. State, county and local governments would also be required to assist the Commission in the enforcement of the law.

    The Act would have an impact on the entire debt-handling industry, including foreclosures, bankruptcies, and property repossession.

    Many professionals within the industry applaud the Assembly’s attempt to regulate more heavily the processes of debt collection.  Out of control debt collection is especially a problem in Chicago and other highly populated areas of the state.  Most  Chicago based bankruptcy attorneys , for example, believe the law will better protect their clients from a variety of issues associated with the process.