Bankruptcy // Current TV

Toni Braxton is out of money, again!

Everybody in the town knows the financial woes of Toni Braxton. This is for the second... more

mky786
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Toni Braxton

Toni Braxton, American R&B singer and songwriter has once again filed for... more

mky786
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American Apparel's Bankruptcy Becoming Imminent

Things have gone from bad to worse for the pants-optional C.E.O. and his t-shirt company. To put it nicely, it's highly probable that the retailer will go bankrupt — and soon. Bluntly: American Apparel is probably fucked. Here's why.

To get a sense of just how fucked, allow me to explain how relative levels of fucked-ness are calculated, in retail. "Same-store" sales or "comparable store" sales are sales figures retailers report from stores open 12 months or longer, and these results are considered a key indicator of retail health for two reasons. Firstly, just measuring a brand's overall sales without distinguishing between sales at newly opened stores and sales at existing stores camouflages the huge start-up costs incurred by store openings. Secondly, if it's the case that a retailer has over-saturated its market, if it then persists in opening new stores, those new stores can actually cannibalize sales from its older outlets. Just measuring "sales" is misleading if you had 223 stores in 2009 and 190 in 2008, because 223 stores will move a lot more product than 190 stores, almost no matter what; while overall sales growth is important, you also need to measure how those same 190 stores fared year-on-year.

American Apparel, as it turns out, has experienced declining year-on-year same-store sales in every month for which the company has made records available since February, 2009. In that month, comps fell by 9%. In March, they were down 11%. April's same-store sales fell 7%; the following month the decline was 10%; the month after that, 13%; the month after that, same-store sales fell 13% again. Then, in August, same-store sales fell 20%. The month after that, they were down 15%. The next month, they fell 6%; the month after that, the decline was 11%; American Apparel wrapped up its horror year with a decline in same-store sales of 6% during the month of December.

As for 2010's numbers, official results aren't even yet available for the first three months of this year, because American Apparel wasn't ready to file by the Securities and Exchange Commission's deadline. The SEC gave Charney's company until August 16 to tell investors how it did in the months of January, February, and March of this year. (As one financial writer quipped, "I guess we'll get Q2 around Christmas.") American Apparel's preliminary first-quarter report showed a decline in same-store sales of 10%, and an operations loss of $17.6 million during the period. (Comparatively, the $3.6 million it lost in the first quarter of 2009 seems small.) There's no reason to believe the company has experienced any miraculous reversal of fortune in the intervening months. 2009 was a bad year for retail, and American Apparel wasn't the only company to experience months of successive year-on-year declining comps — Abercrombie & Fitch was also left reeling for a long spell — but Charney's baby did perform a lot worse than almost all of its competitors. (Even Abercrombie eventually made a hesitant reversal.)

Meanwhile, the company is struggling to manage the mountain of debt it took on during the boom years, when it signed dozens of leases at the height of the real-estate bubble and more than occasionally hired 17-year-old high school drop-outs Charney took a shine to to "manage" the new stores. The company was forced to admit that it would default on its $80 million revolving credit if it didn't renegotiate with the lender, Lion Capital. For now, American Apparel is apparently worth more to its creditors as a going concern than as a bankruptcy, so Lion decided to work with the the company. But American Apparel's interest rate did rise from 15% to 17% when it restructured its loans. And that still leaves open the question of what will happen should its creditors — supermarket billionaire Ron Burkle is now among them — ever change their minds about American Apparel's salvagability.

Yesterday, its auditing firm, Deloitte & Touche, announced it would no longer be working with the retailer because, according to an SEC filing, "Deloitte identified material weaknesses in [American Apparel's] internal control over financial reporting...and advised that the Company has not maintained effective internal control over financial reporting," and because information had come to Deloitte's attention that "may materially impact the reliability of either its previously issued audit report or the underlying consolidated financial statements." Deloitte said more investigation would be needed "before the Company and Deloitte can reach any conclusions as to the reliability" of its financial reports for 2009.

This news sent the stock price tumbling to near-52-week lows.

More at link

http://jezebel.com/5600863/american-apparels-inevitable-bankruptcyThings have gone from bad to worse for the pants-optional C.E.O. and his t-shirt... more

ahappymintleaf
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1 year ago
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Teresa Giudice Addresses Bankruptcy and her ‘Fresh Start’ on Twitter

Teresa Guidice took to her @Teresa_Giudice verified Twitter and left the following... more

Hollywoodly
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1 year ago
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Bankruptcy talk spreads among California officials

http://www.reuters.com/article/idUSTRE64Q6CQ20100527 (Reuters) - Two years after... more

Dagum
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Obama debt = three times the daily average of $1.7 billion under Bush

The federal government is now $13 trillion in the red, the Treasury Department reported Wednesday, marking the first time the government has sunk that far into debt and putting a sharp point on the spending debate on Capitol Hill.

Calculated down to the exact penny, the debt totaled $13,050,826,460,886.97 as of Tuesday, leaping nearly $60 billion since Friday, the previous day for which figures were released.

At $13 trillion, that figure has risen by $2.4 trillion in about 500 days since President Obama took office, or an average of $4.9 billion a day. That's almost three times the daily average of $1.7 billion under the previous administration, and led Republicans on Wednesday to place blame squarely at the feet of Mr. Obama and his fellow Democrats.

"A $13 trillion debt is an alarm bell and a wake-up call combined, but Democrats are not even trying to pass a budget," said House Minority Leader John A. Boehner, Ohio Republican. "How out of touch can Washington Democrats get? Instead of continuing to pay lip service to this issue, President Obama should call on congressional Democrats to pass a budget that provides the fiscal discipline economists say is needed to create jobs and grow our economy."

The White House would not comment for the record, but an official speaking on the condition of anonymity said the administration is "committed to restoring fiscal responsibility."

Spokesmen for the Democratic chairmen of the House and Senate budget committees didn't return messages Wednesday.

In the budget he submitted to Congress in February, the president acknowledged that his plans are not enough to reduce annual deficits to sustainable levels, which he said amounted to a yearly shortfall of 3 percent of gross domestic product. Mr. Obama called for a fiscal commission to make recommendations to close the gap, and commission members at their meeting last week said even that may not be enough.

"I think we've got to be more ambitious than that," said Alice Rivlin, former director of the Congressional Budget Office. "We really have to pick a trajectory that has the debt coming down. And there's probably no magic of whether it comes down 1 percent a year or 2 percent a year or whatever. But it's got to come down over time."

Underscoring the challenge of finding balance, Congress has not been able to pass a fiscal 2011 budget. The Senate Budget Committee has approved a proposed budget, but it has not been debated on the Senate floor, and House Democratic leaders have indicated that they may give up debt reduction altogether this year.

Several unofficial debt clocks had shown the debt crossing the $13 trillion threshold a week ago, though Treasury said those numbers were not official. Those clocks regularly recalibrate using Treasury numbers, but estimate growth rates in order to provide a per-second update on websites.

http://www.washingtontimes.com/news/2010/jun/2/federal-debt-tops-13-trillion-mark/The federal government is now $13 trillion in the red, the Treasury Department... more

curtisreed
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1 year ago
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"Screw the Banks- They Got Us Into This Mortgage Mess"

“I tried to explain my situation to the lender, but they wouldn’t... more

Progresshiv
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1 year ago
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Why Are They Closing St. Vincent's Hospital? (Pt. 6) - Bankruptcy Court

The Hedz-Up Report covers the battle to save St. Vincent's Hospital as it heads... more

trust2020_media
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2 years ago
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Why a Recession is the Perfect Time to Start a Business

Recessions are frequently associated with bankruptcy, layoffs and business failures.... more

digitalfever
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Weekly Pulse: What Would Jesus Insure?

by Lindsay Beyerstein, Media Consortium blogger Christian groups are trying to... more

MediaConsortium
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Risk of Japan going bankrupt is real, analysts say

Greece's debt problems may currently be in the spotlight but Japan is walking its... more

WakeUpPeople
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2 years ago
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18 comments

Homeowners Facing Foreclosure Take Own Lives

The foreclosure crisis in Philadelphia is now becoming a matter of life and death.... more

bundlebear
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2 years ago
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20 Ways Obama’s HealthCare Law’s Will Take Away Our Freedoms…VIDEO…

20 Ways ObamaCare Will Take Away Our Freedoms FireAndreaMitchell.com March 23,... more

ctpatriot1970
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2 years ago
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Wars sending U.S. into ruin

Eric Margolis: Obama the peace president is fighting battles his country cannot afford... more

Vierotchka
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2 years ago
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56 comments

Lehman Brothers' former heads criticised for lapses

A report into the collapse of Lehman Brothers criticises senior executives and auditor... more

suzane
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2 years ago
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Heart Patients Struggling to Afford Healthcare Costs | PriceDoc Talk

For heart patient Frank Amend, an engineer from North Carolina, his heaviest expense... more

pricedoc
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2 years ago
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Game Crazy to Close Yet More Stores After Chapter 11 Filing

Already perpetually living in the shadow of industry giant GameStop, video game... more

ShadowPraxis
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2 years ago
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Ron Paul On World War I & US Interventionism

Ron Paul speaks about wars and the importance of American neutrality.

shanklinmike
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2 years ago
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55 comments

Air America going dark

Liberal talk radio network Air America is planning to file for Chapter 7 bankruptcy,... more

eva2
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2 years ago
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Strategic Defaults - It's Time To Just Walk Away.

Very interesting, The Financial Experts agree that people should walk away from the burden of paying a mortgage on a house that’s not worth the dirt it was built upon. I'm glad to hear murmurings from the “EXPERTS” like… HEY GUYS, IT'S OK TO DEFAULT. IT’S OK TO GO BANKRUPT. IT’S OK TO ASK FOR HELP. For too long, social safety-nets were only respectable for Corporations. For the rest of us this need was touted as shameful. The GOP and BLUEDOGS, since Reagan, have been quite vocal in suggesting that not having enough income to make ends meet is, FAILURE. Of course, not enough income (or Capital) for a business was excused as something outside a corporation’s own doing, in other words NOT THEIR FAULT. Welfare reform won approval and was passed by a Repub in Dem’s clothing. The upshot from this little humdinger made it almost a crime to ask for help, unless of course, you were, YOU GUESSED IT, A CORPORATION. Since SCOTUS deemed corporations, people… they should be subject to the same SHAME as the rest of us “PEOPLE” who have succumbed to hard times.

thinkingblue
PS: TALK ABOUT A HUMDINGER GET A LOAD OF THIS: SCOTUS Overturns Ban on Corporate Political Expenditures: http://www.dailykos.com/storyonly/2010/1/21/828137/-SCOTUS-Overturns-Ban-on-Corporate-Political-Expenditures
Now China, et al can have a say in... WHO THE HELL WILL BE OUR LEADERS HERE IN THE GOOD OLE USA. HUH?
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Strategic Defaults and the Foreclosure Crisis

Nearly a year after the Obama administration unveiled its ambitious housing rescue program, foreclosure tallies continue to break records. Foreclosure filings were reported on more than 2.8 million properties in 2009, up 21 percent from the previous year and 120 percent from 2007, according to RealtyTrac. With nearly 10 percent of mortgages now delinquent--which is also a new record--even more homeowners appear headed for foreclosure this year. "A massive supply of delinquent loans continues to loom over the housing market," RealtyTrac CEO James J. Saccacio said in a statement. "Many of those delinquencies will end up in the foreclosure process in 2010 and beyond."

Homeowners have found themselves in foreclosure for a number of reasons. Some purchased properties they could never really afford. Others lost their jobs--the national unemployment rate remains in the double digits--and had no way to make mortgage payments. But as the crisis rumbles forward, an additional driver of home foreclosures has become clear: Many borrowers have the means to keep paying the mortgage but are simply walking away because they believe it's best for their finances.

The number of so called "strategic defaults" more than doubled, to 588,000, from 2007 to 2008, according to a study by Experian and Oliver Wyman. A separate 2009 survey found that more than a quarter of all existing defaults were strategic. Meanwhile, a growing number of academics are touting the financial benefits of walking away. "Homeowners should be walking away in droves," Brent T. White, a University of Arizona law school professor, said in a recent paper. "The financial costs of foreclosure, while not insignificant, are minimal compared to the financial benefit of strategic default." MORE AT: http://finance.yahoo.com/news/Strategic-Defaults-and-the-usnews-2190373684.html?x=0&mod=loansVery interesting, The Financial Experts agree that people should walk away from the... more

thinkingblue
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2 years ago
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