bankruptcy sale

Bankruptcy Myths and Truths

Many individuals are leery of filing for bankruptcy because of the myths surrounding this kind of legal debt relief, but an experienced Colorado bankruptcy attorney can clear up any misconceptions about the process and effects of bankruptcy on your assets and credit. When swamped by debt, you need a qualified bankruptcy attorney on your side. Here are the three most commonly held misconceptions about bankruptcy and the truth behind them.

Myth: You Will Lose Assets With Bankruptcy

Many people believe that their assets like their home equity or their vehicle will be liquidated in order to pay creditors. However, many assets are exempt from liquidation in bankruptcy proceedings, and even nonexempt assets can be protected with the help of an experienced attorney. Debtors who file for Chapter 7 bankruptcy can often keep their homes, vehicles, retirement homes or other valuables like heirloom jewelry or antiques.

Myth: You Can’t Get Loans After a Bankruptcy Filing

After filing bankruptcy, many people think that they won’t be able to get a loan for a vehicle or renegotiate their mortgage because of the filing. However, many debtors who have filed will find that they are offered loans in the wake of their bankruptcy ruling. These loans may have higher interest rates than other loans, but it is still possible to be approved for a loan or mortgage after filing. Some government mortgages are also available two or three years after the discharge of a bankruptcy.

Myth: Short Sales of Property or Renegotiated Loans Are Alternatives to Bankruptcy

Many lenders will push debtors to renegotiate loans in order to avoid defaulting and filing for bankruptcy, or lenders might suggest a short sale of a property in order to pay off outstanding debt. These alternatives to bankruptcy might sound like a good idea in the short term, but often the new terms of a loan aren’t favorable or the proceeds from a short sale aren’t enough to cover debt. After these types of debt relief are finalized, many debtors end up filing for Chapter 7 or Chapter 11 bankruptcy anyway. An experienced Colorado bankruptcy attorney will be able to discuss better alternatives to bankruptcy or help you file so that you can discharge your debts and protect your assets.

Borders set to ask court for liquidation approval

Borders Group Inc has been under bankruptcy protection since it filed in February, but now it looks as though the bookstore pioneer will have to officially close its doors. News of the possible closure has been passed through the media this entire week, but the corporation will officially ask the bankruptcy court today, Thursday, July 21 for permission to liquidate.

If the liquidation agreement were to be approved, it would provide somewhere between $250 million and $284 million which would be used to pay off as much of the debt owed to creditors as possible. Although the company would be liquidated, Borders Group Inc would retain the rights to its brand name and several leases that they hold. Those assets would then be auctioned off at a later undetermined date.

Liquidation was not the original plan for the company, but after a bidding deadline for the sale of nearly 30 store locations passed and the only possible deal fell through, the company’s hand was forced. The bookstore giant originally hoped that a private-equity firm called Najafi Cos would purchase the business for $215 million in cash and another $220 million in assumed liabilities. After the offer was announced, there was enough negative response and objection from several of the creditors with large amounts of money owed to them that the deal failed to be made.

As one of the largest business bankruptcies of the decade filled with record high filings, consumers and creditors alike await the decision of U.S. Bankruptcy Judge Martin Glenn that could close the 40-year-old business for good.

Source: Reuters, “Borders to seek court’s OK on plan to shut doors,” Nick Brown, 21 July 2011

Denver’s Dish Network set to purchase TerreStar Network for $1.375 billion

Fortune 500 company, Dish Network Corporation, with headquarters in Denver, Colorado, has experienced success despite the recessed economy. The communications corporation has made several large purchases of businesses in financial trouble including DBSD North America earlier this year for approximately $1.4 billion and Blockbuster Inc for nearly $320 million.

According to sources that remain anonymous pursuant to the private sale, Dish Network is at it again. On June 15, 2011 Dish Network submitted a bid for TerreStar Networks Inc, a corporation which filed for bankruptcy protection back in October of this year.

A bidding deadline of 5:00 p.m. passed this Monday, June 27, 2011 with only one offer on the table from Dish Network Corporation for $1.375 billion. TerreStar’s purchasing draw has been their innovation in marketing the first satellite smartphone and their spectrum of approximately 20 megahertz.

Although the billion dollar bid is currently the only one in play, there is a remote possibility that the court could allow another bid to be entered past the Monday deadline. Any new bid, however, would have to be at least $55.5 million over the bid submitted by Dish Network Corporation pursuant to the bankruptcy procedures set out by the bankruptcy court in New York. The higher bid would have to include a $27.5 million “breakup” fee that would have to be paid to Dish Network, the corporation with the “stalking horse” bid.

There is a sale hearing on the bankruptcy court docket for July 7, 2011. Until that point, the definite future of the bankrupt business remains unknown.

Source: Reuters, “Dish stands alone in TerreStar bid,” Nick Brown, 27 June 2011

Thursday kicks off Colorado’s Banning Lewis Ranch bankruptcy sale

We have been following the Banning Lewis Ranch bankruptcy for several months. The 21,500-acre parcel of land is located in Colorado Springs and comprises a large portion of the entire east side of the area. The property was supposed to be the location for a large number of residential homes and smaller commercial businesses.

The proposed expansion of the Pikes Peak area has been stalled due to financial strain for several years, but it appears that the property once again has the hope of being developed. The week-long bankruptcy sale of the property essentially began today, the deadline for bids to be submitted for purchasing the property.

According to a bankruptcy court judge, a closing on the property could occur as soon as June 30, 2011 to end the anticipation over who will control the large expanse of land. An advertisement ran on June 1 in the Wall Street Journal that listed the important facts related to the property including the positive aspects like its development growth possibility, having water, roads and other public improvements in place as well as the possible resources available on the property including mineral, oil and gas.

While the natural reserves were listed as an asset, allegedly only bids with proposed development have been submitted. The court has made it clear that bids would be accepted on the undeveloped 2,400 acres to the north where homes have already been built, not just on the 18,000 acres of completely undeveloped land.

Although the deadline for submission of bids will pass today, the future of the huge parcel of real-estate remains unclear.

Source: The Gazette, “Bids on bankrupt Banning Lewis Ranch due Thursday,” Rich Laden, 22 June 2011