Bankruptcy and Student Loans

John P. Brooke • October 10, 2018

Posted 21 Sep, 2016

After working hard to improve your education, it can be frustrating to deal with massive student loan debt. Recent graduates often struggle to make ends meet, let alone pay down their loans. If your student loan debt is causing unmanageable financial hardship, it is time to talk with a bankruptcy attorney.

Generally, student loans are not dischargeable in bankruptcy. However, by filing either Chapter 7 or Chapter 13 bankruptcy, you can free up funds, making it easier to pay your student loans. At The Brooke Law Firm, we know the bankruptcy laws from the inside out and will explore every option available to get the relief you need.

Helping You Obtain an Increased Cash Flow

While you will most likely not be able to eliminate your student loan debt, there are ways to get the debt under control. By filing Chapter 7 bankruptcy, we can help you discharge your unsecured debts, such as credit card bills and medical expenses. Because you will no longer need to pay those debts, money is freed up to focus on your student loan.

By filing Chapter 13 bankruptcy, it is possible to reduce the amount of your monthly payment to something more workable without the threat of penalty. Your student loan could also be deferred for a period of time. To learn more about your options, call our office in Brightwaters (next to Bay Shore in Suffolk County) at (631) 397-0042 to arrange a free initial consultation.


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By John Brooke • 21 Sep, 2016 • 0 Comments

The first step in the process of filing for bankruptcy is consulting with an experienced, knowledgeable attorney who can meet with you and take the time to discuss all of your available options. I understand that people hit rough patches in their lives and sometimes a bankruptcy is the only option to get back on track. Once you fall behind on your debt it is almost impossible to catch up. When the credit card companies raise your interest rate it is almost impossible to pay back your debt within a reasonable amount of time.

At the initial consultation I will provide you with a questionnaire to fill out that I would need to prepare your case. I will also provide you with a checklist of documents that I would require in order to file. Once you have everything in order and are ready to move forward you can give me a call and we will make time for you to come in at your earliest convenience. I will then prepare your petition within a short period of time which in most cases is only a day or two. You will then have to come back to my office to review and sign the paperwork. After signing, I will have your case filed usually the same day. As you can see, the process moves quickly and orderly.

Approximately one month after your case is filed you will have to attend a court conference called the Meeting of Creditors. Even though it is called the Meeting of Creditors in the vast majority of cases no creditors will ever appear. At this court appearance the trustee assigned to the case will ask you questions for just a few minutes. I will be sitting next to you the whole time to answer any legal questions that may arise.

In a chapter 7 usually there is only one court appearance and in the vast majority of bankruptcies the case will be closed. In a chapter 13 there is an extra step involved which is a confirmation hearing. At the confirmation hearing the trustee should confirm your case based upon the repayment plan submitted. The debtor does not appear at the confirmation hearing and only the attorney needs to attend.

In most chapter 7 bankruptcy cases approximately two months after you go to court your case will be closed and your debt will be forever discharged, meaning your creditors can never attempt to collect the debt again.
By John Brooke • 21 Sep, 2016 • 0 Comments

The Benefits of Filing For Bankruptcy

A major benefit to filing a petition in bankruptcy is the automatic stay that prevents most collection actions by creditors against the debtor or the debtor's property. As long as the stay is in effect creditors may not initiate or continue lawsuits, garnish your wages, call you, harass you or attempt to collect the debt in any way. It allows you a fresh start to your financial life and allows you to start over with a clean slate.

Of course, even when the collection agencies are pounding at your door and you can't pay your mortgage, electricity, cable, and credit card bills all in the same month, bankruptcy may still be your last option. At the initial consultation we will go over all possible options and devise the best strategy for you to take. For most people, if you are considering bankruptcy the chances are good there are no more options available.

One major benefit to filing bankruptcy is that in most cases you will be able to keep your home and car, even in a chapter 7 bankruptcy. With changes in the bankruptcy law in January of 2011 debtors are now allowed to have more than $330,000 equity in their home or more than $12,000 in personal property, including cash. If you have no equity in your home or you do not own a home you can elect to take the federal exemptions which for most people protects all of their assets.

No one even has to know that you filed for bankruptcy. Your friends, family and co-workers don't ever have to know you filed. Bankruptcy is a matter of public record but unless someone specifically inquires into whether you filed for bankruptcy it would never come up.

Bankruptcy also prevents your utilities from being cut off and your car from being repossessed. It will stop a foreclosure and pending sale date and will buy you time to work with your creditors and stay in your home as long as possible. While bankruptcy will allow for the discharge of a number of debts others remain non-dischargeable according to federal law. Non-dischargeable debts include family support, matrimonial judgments, student loans, certain types of taxes, restitution and criminal fines.

Additionally, it is important to remember that chapter 7 bankruptcy does not relieve a co-signer from any responsibility to pay back debt. The creditor has the right to enforce the co-signer's obligation. Chapter 13 on the other hand will protect a co-signer as long as the debtor complies with the bankruptcy plan.
By John Brooke • 21 Sep, 2016 • 0 Comments

Bankruptcy can serve as a Fresh Start and set you up for a successful financial future. Debt worries are a terrible burden to carry. Wouldn’t you like to have:

  • No more sleepless nights
  • No more threat of lawsuits and wage garnishment.
  • No more fear of answering your phone.
  • No more fear of losing your home, car and other assets.
  • No more feeling helpless because your creditors won’t work with you.
  • No more calls from bill collectors.

Most people with severe debt problems are eligible for bankruptcy relief. But anyone that has debt issues should consult with a bankruptcy attorney who can advise you if bankruptcy is an option for you and how it will affect your assets.

There are several different kinds of bankruptcy cases. We refer to these different types of cases as “Bankruptcy Chapters.” The actual bankruptcy law is officially called Title 11, United States Code. It is divided up into a number of different “Chapters” that offer different types of relief.

Each of the bankruptcy chapters is designed for a different purpose. Chapter 7, often called straight bankruptcy, is intended to relieve you from the burden of most ordinary debts, such as credit cards and other unsecured debts. Chapter 13 and Chapter 11 are reorganization cases. They allow the restructuring of certain types of debts and then let you pay them under new terms while giving you and your property court protection from creditors.

An experienced bankruptcy attorney can guide you towards the remedy that will work the best for your situation. The whole point of bankruptcy is to give you a Fresh Start. Misfortune and financial mistakes can strike anyone. Why spend the rest of your life paying for yesterday’s mistakes, if you don’t have to? Let us show you a better way, if there is one.
By John Brooke • 21 Sep, 2016 • 0 Comments

Life After Bankruptcy

You have a fresh start, and some new challenges. Your credit rating, which probably wasn't all that great already, will be impacted by filing for bankruptcy. Filing for bankruptcy will have a short term negative impact on your credit rating, but not filing for bankruptcy may be worse. Not filing for bankruptcy and continuing to incur late fees, legal charges and judgements will continue to bring down your credit until you do something about it.

You really need to ask yourself several key questions including, 'how did I get here? What could I have done differently and what should I do differently in the future? And what have I learned from all of this? Your answers will help you create a better financial afterlife in the wake of a bankruptcy.

Many of my clients tell me that they were able to obtain a new car loan immediately after filing a chapter 7 bankruptcy, even while it is still on their credit report. FHA guidelines also allow you to get a mortgage two (2) years after filing a ch. 7 bankruptcy. You will also get solicited for new credit cards almost immediately because you can only file for a chapter 7 once every eight (8) years. The creditors know you have to pay back your debt to them so they will make credit easy to obtain, although at slightly higher interest rates. Generally, you do not want to incur more credit card debt, however you may want to get one credit card for emergencies or for contingencies such as booking plane tickets or car rentals. Remember, the whole point of filing for bankruptcy in the first place was to rid yourself of debt and get a fresh start, not to get into debt all over again.

After your bankruptcy has been discharged, you need to re-establish your good credit. You need to do so right away for a chapter 7 or after reorganization for a Chapter 13. Obviously, continuing to pay your other bills on time such as your mortgage and utilities will help to build up your credit. You may also want to get either a secured or unsecured credit card and pay it off every month. There are reputable companies available who will help you to build your credit back up. This can be explained more during your free initial consultation.

You are only able to receive a discharge in a chapter 7 bankruptcy after eight (8) years have passed since the commencement of the last case in which you received a discharge. You generally can file another chapter 13 case sooner (usually 4 years) if the need arises. Thus, you should not file a bankruptcy if you need the option of doing it again in the next few years. The case may arise if the reason you are filing bankruptcy is to discharge medical bills and you may have to incur additional medical bills in the future.
By John Brooke • 21 Sep, 2016 • 0 Comments

Questions About Bankruptcy?

1.) What is the difference between a chapter 7 and chapter 13 bankruptcy?

A chapter 7 is a "liquidation" bankruptcy that discharges your debts and you do not pay any of them back. Not all debts are dischargeable though such as some tax debts, criminal fines and most student loans. A chapter 13, on the other hand, is a wage earner's bankruptcy where you pay back anywhere from a fraction of what you owe up to the full amount. Debtors may file a chapter 13, as opposed to a chapter 7, for various reasons such as not passing the means test or they are trying to save their home and repay mortgage arrears.

2.) How long does a chapter 7 bankruptcy take before I receive a discharge?

Generally, once a ch. 7 is filed you will have one court appearance where you meet with the bankruptcy trustee assigned to your case. This is called the 341 Meeting of Creditors. Although it is referred to as the Meeting of Creditors, in most ch. 7 bankruptcy cases the creditors will not appear. The court appearance is usually only a few minutes long and in the vast majority of cases your 341 meeting will be closed by the trustee. Sixty (60) days after this your bankruptcy case should be closed and you will then receive a discharge of your debts. The discharge means you no longer owe the debts listed in your bankruptcy.

3.) Do I have to stand before a judge in a courtroom?

Nope, you will meet with the trustee assigned to your case at the court appearance where he will ask you questions for a few minutes. You will be prepared for the types of questions beforehand and you will feel comfortable by the time your court date arrives.

4.) I thought chapter 7 bankruptcy stopped the foreclosure? Can the bank still take my house?

When you file Bankruptcy, you receive an "automatic stay" on court actions such as foreclosures and sheriff's sales. A creditor can still go into court and ask the bankruptcy judge for a "relief from stay", and if granted the creditor can proceed with a court action to foreclose.

5.) Can I keep some of my debts out of my bankruptcy?

Nope, you must list all of your debts as well as assets in your bankruptcy petition. Debtors are not allowed to pick and choose whom they want to pay back. You may still voluntarily pay back a creditor, such as a family member, car loan or mortgage once your bankruptcy is discharged although you are under no legal obligation to do so.

6.) Can I change my Chapter 7 to a Chapter 13 and vice versa?

Yes, in most cases you are permitted using a "motion to convert." In certain instances you may want to do so if you can no longer afford your chapter 13 plan payments. You may want to convert to a chapter 7 to discharge the debt. A trustee may also make the motion to convert if he feels you have money to pay back some of your debts in a chapter 13. This may happen in rare instances such as if a debtor fails to disclose all of his or her income in the bankruptcy.

7.) Do my spouse and I have to file jointly?

Nope, the decision to file individually or jointly depends on your situation. For instance . . .

  1. If only one spouse owes all or most of the debt then only that spouse should file.
  2. If both spouses owe the debt and want to file a chapter 7 then both can file.
  3. If you're trying to stop a foreclosure then only one spouse who is on the title to the home needs file a Chapter 13.

8.) Are my family, friends and co-workers going to find out that I filed for bankruptcy?

It is a matter of public record that you filed for bankruptcy but in most cases only your creditors are notified that you filed. No one else will know unless you tell them or they do a search in the public court records.

9.) What does it mean to reaffirm a debt such as a car loan?

This means you would become personally liable for the debt again. Sometimes you may reaffirm a debt such as a car loan. The bank may require it or they can repossess your car, even if you are current with the payments. Bankruptcy may be considered a default under your loan terms and some financing companies may repossess the vehicle. I will explain during your free initial consultation whether or not I think it is a good idea to reaffirm depending on your particular case.

Forever 21 Files for Bankruptcy for the Second Time in Six Years

By John Brooke • June 20, 2025
Once a formidable fast-fashion mall staple, Forever 21's parent company filed for bankruptcy protection late Sunday. It plans to "wind down" its U.S. operations unless it can find a buyer for the whole business or some of its parts. The retailer has been a shell of its former self since it first filed for bankruptcy in 2019 . It survived then as a zombie brand with fewer stores, but the chain has struggled to find life beyond the mall and to compete against fast-growing online rivals, including Shein and Temu that ship ultra-cheap goods from China. "We have been unable to find a sustainable path forward, given competition from foreign fast fashion companies ... as well as rising costs, economic challenges impacting our core customers, and evolving consumer trends," Chief Financial Officer Brad Sell said in a statement . Sell specifically called out a tax loophole used by Shein and Temu to ship clothes and accessories straight to U.S. shoppers. That enables them to avoid paying the import duties that Forever 21 and other retailers must pay when they ship goods in bulk to warehouses first. The U.S. government is now working to close the loophole . After its 2019 bankruptcy, the chain was purchased by an unusual joint venture: Big mall operators Simon Property Group and Brookfield Property Partners teamed up with a firm called Authentic Brands Group, which buys and resuscitates dying brands such as Brooks Brothers or Nine West.  Authentic Brands' CEO later described his foray into once-fast-now-ultrafast fashion with Forever 21 as his " biggest mistake ." In 2023, Forever 21's new owners tried another maneuver, signing a partnership with Shein . But losses continued, worsened by the high inflation that had shoppers tightening their clothing budgets. Court documents show Forever 21's liabilities are now ten times bigger than its assets. The company says its stores and website will keep running while executives figure out the chain's future. Stores outside the U.S. are not part of the Chapter 11 filings.

23andMe Bankruptcy Filing Creates Privacy Concerns as DNA Is Up For Sale

By John Brooke • April 18, 2025
With genetic testing company 23andMe filing for Chapter 11 bankruptcy protection and courting bidders, the DNA data of millions of users is up for sale. A Silicon Valley stalwart since 2006, 23andMe has steadily amassed a database of people’s fundamental genetic information under the promise of helping them understand their disposition to diseases and potentially connecting with relatives. But the company’s bankruptcy filing Sunday means information is set to be sold, causing massive worry among privacy experts and advocates. “Folks have absolutely no say in where their data is going to go,” said Tazin Kahn, CEO of the nonprofit Cyber Collective, which advocates for privacy rights and cybersecurity for marginalized people. “How can we be so sure that the downstream impact of whoever purchases this data will not be catastrophic?” she said. A spokesperson for 23andMe said in an emailed statement that there will be no change to how the company stores customers’ data and that it plans to follow all relevant U.S. laws. But Andrew Crawford, an attorney at the nonprofit Center for Democracy and Technology, said genetic data lawfully acquired and held by a tech company has almost no federal regulation to begin with. Not only does the United States not have a meaningful general digital privacy law, he said, but Americans’ medical data faces less legal scrutiny if it’s held by a tech company rather than by a medical professional. The Health Insurance Portability and Accountability Act (HIPAA), which regulates some ways in which health data can be shared and stored in the United States, largely applies only “when that data is held by your doctor, your insurance company, folks kind of associated with the provision of health care,” Crawford said. “HIPAA protections don’t typically attach to entities that have IOT [internet of things] devices like fitness trackers and in many cases the genetic testing companies like 23andMe,” he said. There is precedent for 23andMe’s losing control of users’ data. In 2023, a hacker gained access to the data of what the company later admitted were around 6.9 million people, almost half of its user base at the time. Article credited from NBC News

Hooters Restaurant Chain Filed for Chapter 11 Bankruptcy

By John Brooke • April 18, 2025
Restaurant chain Hooters of America filed for bankruptcy in Texas on Monday, seeking to address its $376 million debt by selling all of its company-owned restaurants to a franchise group backed by the company’s founders. Hooters, like other casual dining restaurants, has struggled in recent years due to inflation, the high costs of labor and food, and declining spending by cash-strapped American consumers. The company currently directly owns and operates 151 locations, with another 154 restaurants operated by franchisees, primarily in the United States. The privately-owned company, which shares a private equity owner with recently-bankrupt TGI Fridays, intends to sell all corporate-owned locations to a buyer group comprised of two existing Hooters franchisees, who operate 30 high-performing Hooters locations in the U.S., mainly in Florida and Illinois. Hooters did not disclose the purchase price of the transaction, which must be approved by a U.S. bankruptcy judge before it becomes final. Founded in 1983, Hooters became famous for its chicken wings and its servers’ uniform of orange shorts and low-cut tank tops. The buyer group is backed by some of Hooters’ original founders, and it pledged to take Hooters “back to its roots.” “With over 30 years of hands-on experience across the Hooters ecosystem, we have a profound understanding of our customers and what it takes to not only meet, but consistently exceed their expectations,” said Neil Kiefer, a member of the buyer group and the current CEO of the original Hooters’ location in Clearwater, Florida. Hooters said it expects to complete the deal and emerge from bankruptcy in three to four months. The company has lined up about $35 million in financing from its existing lender group to complete the bankruptcy transaction. Casual dining restaurants have been hammered by rising costs in 2024, with well-known chains like TGI Fridays, Red Lobster, Bucca di Beppo, and Rubio’s Coastal Grill all filing for bankruptcy last year. Restaurant prices have risen about 30% in the last 5 years, outpacing consumer prices overall, according to the Federal Reserve Bank of St. Louis. Article credited from Reuters.com

Joann Fabrics will close 500 stores after second bankruptcy filing

By John Brooke • February 14, 2025
Struggling fabric and crafts seller Joann plans to close about 500 of its stores across the U.S. — or more than half of its current nationwide footprint. The move, announced Wednesday, arrives amid a tumultuous time for Joann. Last month, the Hudson, Ohio-based retailer f iled for Chapter 11 bankruptcy protection for the second time within a year, with the company pointing to issues like sluggish consumer demand and inventory shortages. Joann previously sought Chapter 11 in March 2024 and later emerged as a private company. But after operational challenges continued to pile up, Joann filed for bankruptcy again in January. It’s now looking to sell the business — and maintained in a filing Wednesday that closing “underperforming” locations is necessary to complete that process. “This was a very difficult decision to make, given the major impact we know it will have on our Team Members, our customers and all of the communities we serve,” the company said in a statement sent to The Associated Press. “(But) right-sizing our store footprint is a critical part of our efforts to ensure the best path forward.” Joann currently operates around 800 stores across 49 states. The initial list of the roughly 500 locations it’s looking to close can be found on the company’s restructuring website — spanning states including Arizona, California, Colorado, Florida, Georgia, Illinois, Michigan, New York, Pennsylvania, Texas and more. When exactly those closures will take place and how many employees will be impacted has yet to be seen. Joann’s Wednesday motion seeks court permission to begin the process. Joann’s roots date back to 1943, with a single storefront in Cleveland, Ohio. And the retailer later grew into a national chain. Formerly known as Jo-Ann Fabric and Craft Stores, the company rebranded itself with the shortened “Joann” name for its 75th anniversary. Both of Joann’s bankruptcy filings seen over the last year arrived amid some slowdowns in discretionary spending — notably with consumers taking a step back from at-home crafts, at least relative to the early COVID-19 pandemic boom. Joann has also faced rising competition in the crafts space from rivals like Hobby Lobby, as well as from larger retailers, like Target, who now offer ample art supplies and kits. And, while Joann turned to implementing a new business plan after emerging from bankruptcy last spring, “unanticipated inventory challenges post-emergence, coupled with the prolonged impact of an excessively sluggish retail economy, put (Joann) back into an untenable debt position,” interim CEO Michael Prendergast noted in a sworn court declaration filed when Joann initiated its latest Chapter 11 proceedings on Jan. 15. Prendergast explained that inventory shortages had significant ripple effects on Joann’s core business, particularly when “in-stock levels eventually dropped by upwards of 10%" and led to a “new phase of operational distress.” Citing these and other macroeconomic challenges seen in the retail space over recent years, Joann has maintained that a sale of the business is the best path forward. The company says it has a proposed “stalking horse” bid agreement with Gordon Brothers Retail Partners. Article credited online at Reuters.com

Spirit Airlines Filed for Chapter 11 Bankruptcy

By John Brooke • January 17, 2025
Spirit Airlines has filed for bankruptcy protection, the no-frills U.S. travel pioneer said on Monday, after struggling with years of losses, failed merger attempts and heavy debt levels. It is the first major U.S. airline to file for Chapter 11 in more than a decade, after a proposed $3.8 billion merger with JetBlue Airways collapsed in January. The Florida-based airline said it had pre-arranged a deal with its bondholders to restructure its debts and raise money to help it operate during the bankruptcy process, which it expects to exit in the first quarter of 2025. Intense competition among U.S. carriers for price-sensitive leisure travelers as well as an oversupply of airline seats in the domestic market hit Spirit's pricing power. Its average fare per passenger was down 19% on a year-on-year basis in the first half of this year from a year earlier. The carrier said it expected to continue operating its business as normal through the proceedings and customers could book and fly without interruption. The Chapter 11 process will not impact wages or benefits of its employees, it said. Its vendors and aircraft lessors will also continue to be paid and will not be impaired, it added. The company said it expected to be delisted from the New York Stock Exchange in the near term, and that its shares would be canceled and have no value as part of the restructuring. Spirit's shares, which have plunged more than 90% this year, were halted on Monday. Shares of rival low-cost carriers Frontier Airlines and JetBlue fell 14% and 6%, respectively. Spirit, known for its bright yellow livery, is the first major U.S. airline to file for Chapter 11 since 2011. It has been among the airlines most heavily affected by issues with RTX's Pratt & Whitney Geared Turbofan engines, which have forced it to ground multiple aircraft and driven up costs. Spirit has not posted a full-year profit since 2019. It lost about $360 million in the first half of this year despite strong travel demand. Analysts say a merger with JetBlue would have thrown a lifeline to the company. However, a Boston judge blocked the deal on the grounds it would reduce competition, raising doubts about the company's ability to manage looming debt maturities. Spirit has been shrinking its operations as part of its efforts to cut costs and shore up its finances. It has furloughed hundreds of pilots and delayed aircraft deliveries. It is also selling its planes to boost liquidity. The discount carrier became popular with budget-conscious customers willing to forgo amenities like checked bags and seat assignments. Ultra-low-cost carriers, which excelled at keeping their expenses low and offering affordable, no-frills travel, have struggled since the COVID pandemic as some travelers prefer to pay extra for a more comfortable journey as they pursue experiences. Article credited from Reuters.com

Party City is Going Out of Business

By John Brooke • December 20, 2024
Party City is closing down all of its stores, ending nearly 40 years in business. CEO Barry Litwin told corporate employees Friday in a meeting that Party City is "winding down" operations immediately and that today will be their last day of employment. "That is without question the most difficult message that I've ever had to deliver," Litwin said at the meeting, which was held on a video conference call. Party City's "very best efforts have not been enough to overcome" its financial challenges, he added, resulting in the company's collapse. "It's really important for you to know that we've done everything possible that we could to try to avoid this outcome," Litwin said. "Unfortunately, it's necessary to commence a winddown process immediately." The chain is the largest party supply store in the United States and recently exited bankruptcy in September 2023. That plan included the canceling of nearly $1 billion in debt, the dissolution of its stock and a majority of its 800 US stores staying open. Though in the short term Party City managed to avoid the same fate as Bed Bath & Beyond and 99 Cents Only Stores, it still had more than $800 million in debt to overcome, which strained earnings this year. The company had closed more than 80 stores from the end of 2022 to August 2024, according to its most recent financial documents. Party City said in a previous statement that it had renegotiated many of its leases and exited "less productive locations," which resulted in many of chain's workers remaining employed. The company had approximately 6,400 full-time and 10,100 part-time workers as of 2021. Party City filed for bankruptcy in January 2023 after struggling to pay off its $1.7 billion debt load. As a result, it was also delisted from the New York Stock Exchange. Net sales for Party City decreased to $407 million for the three months ending in September 2023, compared to $502 million in the same period in 2022, according to the company's latest financial disclosures. The company, which sells balloons, Halloween costumes and other party goods, has stumbled in the face of growing competition from e-commerce sites and pop-up concepts like Spirit Halloween. Competition from big-box retailers like Amazon, Walmart, Costco and others also crushed smaller chains. It also had to contend with rising costs during the pandemic and a helium shortage, which hurt its crucial balloon business. The chain joins a growing list of retailer bankruptcies this year as customers cut back on discretionary spending amid the rising cost of living. Notably, Big Lots announced Thursday it was starting "going out of business" sales at all of its locations after a plan for a private equity firm to rescue the bankruptcy retailer failed. Story credited by CNN.

Satire Publication the Onion Buys Alex Jones' Infowars at Auction 

By John Brooke • November 15, 2024
The satirical news publication The Onion was named the winning bidder for Alex Jones' Infowars at a bankruptcy auction Thursday, backed by families of Sandy Hook Elementary School shooting victims whom Jones owes more than $1 billion in defamation judgments for calling the massacre a hoax. The purchase would turn over Jones’ company, which for decades has peddled in conspiracy and misinformation, to a humor website that plans to relaunch the Infowars platform in January as a parody. But the judge in Jones’ bankruptcy case said Thursday that he had concerns about how the auction was conducted and ordered a hearing for next week after complaints by lawyers for Jones and a company affiliated with Jones that put in a $3.5 million bid. Within hours of the announcement about The Onion's winning bid, Infowars’ website was down and Jones was broadcasting from what he said was a new studio location. Up for sale were Infowars’ website; social media accounts; studio in Austin, Texas; trademarks; video archive; and other assets. “The dissolution of Alex Jones’ assets and the death of Infowars is the justice we have long awaited and fought for,” Robbie Parker, whose daughter Emilie was killed in the 2012 shooting in Connecticut, said in a statement provided by his lawyers. The satirical outlet — which carries the banner of “America’s Finest News Source” on its masthead — was founded in the 1980s and for decades has skewered politics and pop culture, including making Jones a frequent target of mocking articles. Mass shootings in the U.S., such as the Sandy Hook attack, are often followed by The Onion publishing slightly updated versions of one of its most well-known recurring pieces: "'No Way to Prevent This,' Says Only Nation Where This Regularly Happens.” On his live broadcast, Jones was angry and defiant, calling the sale “a total attack on free speech.” He later announced his show was being shut down. Jones then resumed his broadcast from a new studio nearby and carried it live on his accounts on X. At a court hearing Thursday afternoon in Houston, the trustee who oversaw the auction, Christopher Murray, acknowledged that The Onion did not have the highest bid but said it was a better deal overall because some of the Sandy Hook families agreed to forgo a portion of the sale proceeds to pay Jones' other creditors. First United American Companies, a business affiliated with one of Jones’ product-selling websites, submitted the only other bid. The trustee said he could not put a dollar amount on The Onion’s bid. Walter Cicack, an attorney for First United American Companies, told U.S. Bankruptcy Judge Christopher Lopez that Murray changed the auction process only days before, deciding not to hold a round Wednesday where parties could outbid each other. Sealed bids were submitted last week, and the trustee chose only from those, Cicack said. Murray said he followed the judge's auction rules laid out in a September order that made the overbidding round optional. But Lopez said he was surprised such a round of bidding was not held and that he had concerns about transparency. After the hearing, Jones said on his show that he thought the auction was unfairly rigged and expressed optimism that the judge would nullify the sale. He has repeatedly told his listeners that if his supporters won the bidding, he could stay on the Infowars platforms but that he had set up a new studio, websites and social media accounts in case they were needed. “This was a auction that didn’t happen, with a bid that was lower, with money that wasn’t real," he said. Ben Collins, CEO of The Onion’s parent company, Global Tetrahedron, told The Associated Press in a video interview earlier Thursday that it planned to relaunch the Infowars website in January with satire aimed at conspiracy theorists and right-wing personalities, as well as educational information about gun violence prevention from the group Everytown for Gun Safety. Collins would not disclose the bid amount. “We thought it would be a very funny joke if we bought this thing, probably one of the better jokes we’ve ever told,” Collins said. “The (Sandy Hook) families decided they would effectively join our bid, back our bid, to try to get us over the finish line. Because by the end of the day, it was us or Alex Jones, who could either continue this website unabated, basically unpunished, for what he’s done to these families over the years, or we could make a dumb, stupid website, and we decided to do the second thing.” Jones did not lose his personal X account, which has more than 3 million followers, in the auction. But the bankruptcy judge is deciding whether his personal accounts can be sold off at the trustee’s request. Sandy Hook families sued Jones and his company for repeatedly saying on his show that the shooting that killed 20 children and six educators in Newtown, Connecticut, was a hoax staged by crisis actors to spur more gun control. Parents and children of many of the victims testified that they were traumatized by Jones’ conspiracies and threats by his followers . Jones has since acknowledged the shooting was “100% real.” The Onion, based in Chicago, bills itself as “the world’s leading news publication, offering highly acclaimed, universally revered coverage of breaking national, international, and local news events.” Recent headlines have included, “Trump Boys Have Slap Fight Over Who Gets To Run Foreign Policy Meetings,” “Oklahoma Law Requires Ten Commandments To Be Displayed In Every Womb” and “Man Forgetting Difference Between Meteoroid, Meteorite Struggles To Describe What Just Killed His Dog.” Story credit from Reuters.com

Red Lobster Exists Bankruptcy with New Owner

By John Brooke • September 20, 2024
Red Lobster announced its exit from Chapter 11 bankruptcy on 16 September after gaining the newly created RL Investor Holdings as its new owner and officially appointing Damola Adamolekun as CEO. RL Investor Holdings is an entity created by funds managed by affiliates of Fortress Investment Group, alongside co-investors TCW Private Credit and Blue Torch. With the company taking over as the chain’s new owner, Red Lobster has exited its bankruptcy status. “As part of our new ownership structure, we have backers who have a history of making successful investments in restaurants. Our comprehensive and long-term investment plan for Red Lobster includes a commitment of more than USD 60 million [EUR 54 million] in new funding, which will help us to deliver improvements across every aspect of our company,” Adamolekun said. “I’m looking forward to working with our 30,000-strong team to bring our plan to life.” Post-bankruptcy, Adamolekun said Red Lobster is a stronger, more resilient company. Shedding the bankruptcy label has allowed the chain to “start a new chapter in our history," Adamolekun said. Though Red Lobster’s bankruptcy status has been left behind, its debts have not. Samut Sakhon, Thailand-based seafood company Thai Union is one of several companies claiming the Orlando, Florida, U.S.A.-based restaurant chain owes it money. Thai Union, which once owned a significant share of Red Lobster, claims the chain owes the group around $3.7 million due to sudden changes in demand forecasts for shrimp. Thai Union said it built up an excess inventory of shrimp in late 2023 that was custom-produced for Red Lobster – worth around $22.9 million. Red Lobster worked with Thai Union to lessen that inventory, but Thai Union is still seeking $3.7 million in related costs due to fluctuations in anticipated demand. Red Lobster is now an independent, privately-held company with 545 restaurant locations in 44 states and four Canadian provinces.

Tupperware Files for Bankruptcy

By John Brooke • September 20, 2024
Tupperware, known the world over for its plastic food storage containers, has filed for bankruptcy after years of falling popularity and financial troubles. “Over the last several years, the company’s financial position has been severely impacted by the challenging macroeconomic environment,” Laurie Ann Goldman, president and CEO of Tupperware Brands Corporation, said in a statement late Tuesday. Chapter 11 bankruptcy allows companies to solve their financial problems by restructuring. “This process is meant to provide us with essential flexibility as we pursue strategic alternatives to support our transformation into a digital-first, technology-led company,” Goldman added. Tupperware has historically sold to consumers only through so-called direct sales, most commonly at “Tupperware parties,” similar to cosmetic company Avon’s business model, and only began selling in Target in 2022. “The party is over for Tupperware,” Susannah Streeter, head of money and markets at UK investment platform Hargreaves Lansdown, said in a note. “There is still a chance a buyer for the business can be found but, with plastic seen as far from fantastic among eco-aware consumers, revitalizing the brand will be an uphill struggle.” Even though the brand was once a household name, it became less popular with younger consumers, in contrast with some of its competitors. Tupperware rang the alarm bells in April 2023 when it disclosed in a regulatory filing that it could go out of business. The Florida-based company said at the time that, if it didn’t find more cash, it would no longer be able to fund its operations. Tupperware found that lifeline four months later, when it reached a deal with its creditors to reduce its interest payment obligations by $150 million. It also secured $21 million in new financing, an extension on the deadline for paying back about $348 million in debt and a reduction in the amount of debt it owed by around $55 million. But the company’s finances still declined following the deal. The company said Tuesday that it would seek the approval of the bankruptcy court to continue operating during Chapter 11 proceedings. Many businesses file for bankruptcy protection to wind down some operations, shed debt and cut costs. Chapter 11 bankruptcy is a common route. Tupperware shares have plummeted 74.5% this year and last traded at just 51 cents. Article credited from CNN.com

Blink Fitness Files for Bankruptcy

By John Brooke • August 16, 2024
Blink Fitness, an Equinox-owned chain of about 100 low-cost gyms, filed for bankruptcy on Monday in Delaware seeking to find a buyer for its business. Blink has about $280 million in debt, and it blamed its bankruptcy on the lingering effects from the COVID-19 pandemic, which forced it to shut its operations for nine months and incur additional debt and deferred rent obligations, according to court filings. Blink markets itself as an "all-inclusive and inviting" place for everybody to get fit, with membership prices between $15 and $45 per month. More than 65% of the company's 443,000 members are younger than 35 years old, according to court filings. Blink aims to quickly sell its business in bankruptcy, potentially closing underperforming locations in the process, according to its court filings. Blink began marketing its business in July 2024, and it has already received substantial interest from potential buyers, Blink chief restructuring officer Steven Shenker wrote in a Monday court filing. Despite its high debt, Blink has reinvested in 30 of its most popular locations in the first half of 2024, buying new gym equipment, updating its club interiors, and partnering with wellness brands to offer supplemental fitness recovery options. Those efforts have resulted in higher user satisfaction and an increase in revenue, according to Blink. "Over the last several months, we have been focused on strengthening Blink's financial foundation and positioning the business for long-term success," Blink CEO Guy Harkless said in a statement. Blink has lined up $21 million in additional financing from its lenders to continue operations and fund its bankruptcy case. Founded in 2011, the New York-based company has 92 owned locations and 10 franchised locations in New York, New Jersey, Massachusetts, Texas, Illinois, and California. Blink has about 2,000 employees.
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