• Jackson Hewitt Wins Approval from Court to Exit Bankruptcy

    Jackson Hewitt Tax Service Inc. received court approval for their reorganization plan on August 8, 2011, which the company hopes will allow for its exit from bankruptcy before the week is over.

    U.S. Bankruptcy Judge Mary Walrath confirmed the Chapter 11 restructuring plan for Jackson Hewitt in Wilmington, Delaware. The company is the nation’s second largest tax preparer. The company filed for bankruptcy protection in May, 2011.

    The company has a total of $357 million in outstanding debt that they owe to lenders. Jackson Hewitt is offering ownership of the company and a $100 million term loan under the reorganization plan. Existing stockholders will be offered nothing under the plan.

    Court papers estimate the company’s worth at $225 million, and lenders will be providing a $115 million loan to keep the company running until the next tax season begins.

    A majority of the company’s unsecured creditors are plaintiffs in class-action lawsuits that challenged Jackson Hewitt’s practice of issuing loans based on customers’ anticipated tax returns. Critics have accused the company of violating consumer-protection statutes with the offering of high-interest rapid refunds to tax filers. The IRS stopped providing tax preparers with advance warnings of filers whose returns could be at risk, making the offering of the refund loans untenable and ending the practice.

    Benjamin Brand Services – Chicago bankruptcy lawyer

  • Former University of Georgia Coach Jim Donnan Reaches Bankruptcy Settlement

    Jim Donnan, ex-ESPN analyst and former football coach at University of Georgia, has reached a settlement agreement in his ongoing bankruptcy case. The settlement has him returning millions of dollars he made from an alleged Ponzi scheme, according to court reports.

    Under the terms of the settlement, Donnan would pay $5.5 million to the creditors of West Virginia-based GLC Enterprises. A source familiar with the settlement told the press, “At the end of the day, his (Donnan’s) net worth is going to be pretty close to nothing.”

    Doonan’s attorneys said that their client was the first investor in GLC, a liquidation company that generated revenue through the purchase and resale of consumer products. He’s acknowledged investing $5.4 million of his own money in the company, which is also now in bankruptcy proceedings.

    Sources told the press that Donnan and the original operators of GLC, Greg and Linda Crabtree, are being investigated by the FBI and IRS for their roles in running an apparent Ponzi scheme.

    Court documents show investors sank about $82 million into GLC, but less than $12 million was spent on actual inventory.

    The court has not accepted the agreement offer as of yet. The agreement requires approval from the bankruptcy court, and any creditors in GLC’s bankruptcy case are entitled to raise objections.

    Bankruptcy is a valid legal option, no matter who you are, or what your social status is. As long as you qualify through the means tests, you can enter and work towards receiving a discharge. Bankruptcy offers the ability to get your financial life back on track with little disruption to your life.

    Benjamin Brand Services – Chicago bankruptcy lawyer