Category Archives: NY chapter 11 debtors

Avoiding Emergency Bankruptcy Filings

It was the day before Thanksgiving.  A friend of mine called me in a panic.   She received a notification that her bank account was frozen by a creditor; she was to get a direct deposit of her salary in the next 2 days, which was two weeks before Christmas.  She needed to file bankruptcy fast in order to trigger the automatic stay (legal principle that means no creditor can take action to harm you).

I stayed up until midnight that day in order to get the case filed for her.  Her business had gone bad and this was the fallout from it.

Often, bankruptcy cases are filed on an emergency basis. In many instances, time may be of the essence and you need to file the case immediately (e.g. a creditor  has a judgment against you and has sent the Sheriff to your home or business; you have received a notice of garnishment of your wages or bank account by a taxing body).  If this firedrill can be avoided, it should be.

Rushing into a case is pretty much never a good idea.   Filing the petition on an emergency basis only increases the costs of your case and there may not be enough time to research potential issues that may arise during the course of your case.   You may omit important creditors.  You may omit assets.  If the schedules are not accurate,  you will need to amend them and that costs more money to do.  Substantial, repeated amendments do not leave favorable impressions upon the U.S. Trustee or the Ch. 7 Trustee.

A debtor is permitted to file a barebones “emergency “bankruptcy petition together with a list of 20 largest creditors. The full set of schedules must be submitted within 14 days, unless extended.

Regardless of whether the case is an emergency filing or not, if you are an individual, you MUST complete pre-bankruptcy filing credit counseling course at least 24 hours before any case is filed.

BOTTOM LINE:

  • Talk to an attorney.  He or she can give you the questionnaire you need to fill out well ahead of time. He or she will also give you a list of documents you will need You can start gathering that info.  If the case is billed hourly, you will save yourself money by gathering up this information rather than having a paralegal do it.
  • Pre-bankruptcy planning is always advisable for any individual or business.  You don’t want to throw good money after bad (meaning you don’t want to pay down debt that ultimately may be discharged). You don’t want to make preferential or fraudulent transfers.    Often, there are non-bankruptcy options, particularly for businesses (but that can be a topic for another blog post).

DISCLAIMER:  This does  not constitute legal advice.  This post does not create an attorney client relationship.  Consultant an attorney for more information re: this topic.

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Movie Financier Hedge Fund Files for Chapter 11 Over Increasing Litigation Costs

by Justin A. Saporito, Law Clerk

Aramid Entertainment Fund, Limited filed for Chapter 11 protection in the Bankruptcy Court for the Southern District of New York on June 13, 2014.  Debtor has declared assets of $237.3 million and consolidated debt of $11.5 million.  Debtor was assigned case number 1:14-bk-11802, a judge has yet to be assigned.  Approximately 96 creditors were listed in the petition; among them are several other Aramid entities including Aramid Liquidating Trust, Ltd. and Aramid Entertainment, Inc. which jointly filed with the Debtor and were assigned consecutive case numbers.

aramid-logo-618x400                    Aramid Entertainment Fund, Limited is part of Aramid Capital Partners, LLP, a London based hedge fund that specializes in financing movies.  According to their website, Aramid Capital has provided financing for thirty-two (32) movies including Paranormal Activity, W., and How to Lose Friends & Alienate People.  Please click here for a list of their productions.

                   Debtor filed for Chapter 11 protection due to the cost of ongoing litigation against several of its borrowers who failed to repay loans or violated film-financing agreements.  One such suit began in February 2012 and is over an alleged $44 million in losses.  Debtor invested $22 million in a financing deal between Relativity Media, LLC and Sony Pictures.  Debtor alleges that executives from Fortress Investment Group, LLC used Aramid’s confidential information, which was allegedly obtained during a 2010 portfolio review as part of a proposed purchase of Debtor’s assets, to make a deal with Sony that destroyed Debtor’s investments.

                     Debtor and its affiliates are represented by James C. McCarroll, a partner at Reed Smith, LLP who specializes in Financial Industry, Commercial Restructuring, and Bankruptcy.

NJ Janitorial Firm Bradford and Byrd Tries to Clean House with a Chapter 11

By: Justin A. Saporito, Law Clerk

Bradford & Byrd Associates, Inc. filed for voluntary Chapter 11 bankruptcy in the United States Bankruptcy Court for the District of New Jersey on May 23rd, 2014.  The case has been assigned to the Honorable Christine M. Gravelle under case number 3:14:bk-20478.

b&bmopper400Debtor claims assets of less than $50,000 with liabilities ranging between $500,000 and $1 million.  Among debtor’s 21 creditors are the Internal Revenue Service, New Jersey Department of Labor, New York State Workers Compensation Board, Mercedes Benz, and several other companies and private individuals.  Debtor is represented by Bunce Atkinson of Atkinson & DeBartolo, PC from Red Bank, New Jersey.

Debtor is a janitorial firm that was founded in 1989 and headquartered in Freehold, New Jersey.  Debtor provides janitorial services clients in New York, New Jersey, Pennsylvania, Georgia, and North and South Carolina.  Some of debtor’s more notable clients include UPS, the Social Security Administration Headquarters, and Public Service Electric and Gas Company.  In debtor’s more than 20 years in business, it has achieved some noticeable accomplishments including servicing the Statue of Liberty in 1996 and being contracted to clean vintage chandeliers at West Point Military Academy in 2001.

Affairs Afloat, Inc. Takes On Water With Chapter 11 Filing

By:  Justin A. Saporito, MAZURKRAEMER Legal Clerk

Affairs Afloat, Inc. voluntarily filed for Chapter 11 bankruptcy relief on October 15th, 2013.  The petition was filed in the Bankruptcy Court for the Southern District of New York.  The case has been assigned to the Honorable Judge Burton R. Lifland, under case number 1:13-bk-13356. (Click case number for docket summary.)

queen of hearts

The debtor is a river cruise operator that operates in New York City out of Pier 78 on West 38th Street.   Affairs Afloat, Inc. was established in 1988 and provides services through its two river cruise ships, The Queen of Hearts (pictured right) and The Star of Palm Beach.  The Queen of Hearts is a three level ship that is Coast Guard certified for 450 guests plus staff and crew.  The Star of Palm Beach is a two level ship and is Coast Guard certified for 380 guests plus staff and crew.

Affairs Afloat hosts various cruises on specified dates in addition to its weekly cruises such as its Shadow Nightclub on Tuesday nights, Cruise Brasil on Wednesday nights, Candela Cruise on Thursday nights.  Debtor also holds a Kiddie Cruise on Sunday afternoons.  Debtor offers group packages for many of its events and its services are also available for private events.  For more information about debtor’s programs and services please visit their website here.

Debtor claimed assets and liabilities of between $1 and $10 million with HSBC Bank, the Internal Revenue Service, the Security Exchange Commission.  It appears that the Chapter 11 filing has not affected debtor’s operations as it is accepting reservations for cruises for Halloween and New Year’s Eve.  Affairs Afloat, Inc. is represented by Jonathan S. Pasternak of DelBello Donnellan Weingarten Wise & Wiederkehr, LLP.

Fat Lady May Sing for the Last Time: The New York City Opera Files Chapter 11

By:  Justin A. Saporito, MAZURKRAEMER Law Clerk and Salene Mazur Kraemer, Owner

New York City Opera, Inc. filed a petition for Chapter 11 bankruptcy protection on October 3rd, 2013.  The petition was filed in the United States Bankruptcy Court for the Southern District of New York.  The case was assigned to the Honorable Judge Stuart M. Bernstein under case # 1:13-bk-13240.  Among the motions filed with the petition was a motion to authorize debtor to refund pre-paid tickets.  Please click here for a docket summary.

New York City Opera, Inc. was dubbed “The People’s Opera” by former NYC Mayor new_york_city_opera_zoom945Fiorello LaGuardia.  It has hosted and performed traditional and contemporary operas since its founding in 1943.  Debtor filed for Chapter 11 protection due to a projected $44.1 million deficit for 2012 and a combination of a troubled economy, decreased donations, and increasing pension obligations.  The debtor raised approximately $1.5 million from an online fund-raising campaign (Kickstarter), but required $7 million by the end of September in order to fund itself through the end of the year.  The board and management have begun necessary financial and operational steps to wind down the company with no plans to borrow in order to fund the 2014 season.

Debtor claims assets and liabilities of between $1 and $10 million and 93 creditors including New York City Ballet, Inc. and the New York City Dept. of Finance.  Please refer to the docket summary for a complete list of creditors.  The debtor is represented by Kenneth A. Rosen and Nicole Stefanelli of Lowenstein Sandler LLP.

Debtor's Attorney Nicole Stefanelli


Salene and NYC Opera Debtor’s Attorney Nicole Stefanelli

Salene had the privilege of hanging out with Nicole over the weekend in NYC.   Nicole and Salene had met at the American Bankruptcy Institute this past Spring.  They were also friends via Twitter.   Nicole said that this Chapter 11 filing has been published in newspapers all over the world.  She also said that her firm was doing the representation PRO BONO.  She will be handling first day motions on Thursday!

This will definitely be an interesting case to watch.

Rhinoceros Visual FX and Design Firm Files for Chapter 11 Bankruptcy in New York

By:  Justin A. Saporito, MAZURKRAEMER Law Clerk

On September 17th, 2013 Rhinoceros Visual Effects and Design LLC filed a VictoriaSecretsvoluntary petition for bankruptcy relief under Chapter 11 of the U.S. Bankruptcy Code.  The filing was made in the U.S. Bankruptcy Court in the Southern District of New York and assigned case number 1:13-bk-13016. (A summary of the docket can be found here. )  The case has been assigned to the Honorable Judge Stuart M. Bernstein under case number 1:13-bk-13016.

The Debtor is a Multi-Video Group/Gravity Company.  The Multi Video Group, Ltd. owns and/or is associated with various companies that are in the business of graphic and audio design and editing.  Internationally, The Multi Video Goup, Ltd. is associated with companies such as Gravity Post Production in Tel Aviv, Israel and Digital Renaissance in Oberhausen, Germany.  Rhinoceros Visual Effects and Design LLC is, as the name implies, a visual effects and design firm located at 315 Madison Avenue, 3rd Floor New York, NY 10017.  Debtor’s clientèle has included Victoria’s Secret Stores, LLC, a subsidiary of Limited Brands, Inc., and Six Flags Theme Parks, Inc. (sources: VS, Six Flags)

The Debtor claims assets between $100,001 and $500,000 and liabilities between $1 and $10 million.  It has listed 62 creditors including various individuals and companies such as Bell Technologies and Verizon.  For a complete list of creditors please click here.  Debtor is represented by Paul H. Aloe of Kudman Trachten Aloe LLP.  A Scheduling Order was signed on September 17th, 2013 scheduling the Initial Conference Hearing to be held on September 31st, 2013 at 10:00 AM.