New York residents who invest in AgFeed Industries may want to take note of the business filing for bankruptcy. The hog producer, which is based in China but has interests in the United States, has filed forChapter 11 bankruptcy. Chapter 11 enables businesses to continue operations while reorganizing and restructuring their debt. Based on the filing, AgFeed has $127 million in assets, but they have $27 million in debt. One of the issues that led to the company filing for bankruptcy was a contractual dispute with a major hog buyer, Hormel. According to Hormel, AgFeed inflated the price of hogs by overstating production costs. AgFeed countered that Hormel was sending them unhealthy young hogs. In spite of the fact that an arbitrator sided with both parties, Hormel was ultimately awarded $8 million, which was subtracted from what Hormel owed AgFeed. However, disputes with Hormel were only part of the company’s financial difficulties. It was discovered in 2011, thanks to an internal investigation initiated by the AgFeed’s board of directors, that there were bookkeeping irregularities associated with the company’s Chinese operations. The investigation showed that the company was over-reporting profits by undermining the amount of bad debt owed to the company… Continue reading
After failing to secure a government bailout or locate a buyer, Lehman Brothers Holdings Inc. filed for Chapter 11bankruptcy on Sept. 15, 2008. The $2 billion price tag for winding down the massive holdings of the New York-based investment banking firm has eclipsed the $757 million in bankruptcy costs incurred by the previous record holder Enron. While some critics feel that the fees being charged in the Lehman bankruptcy case are unusually high, a professor at the University of Illinois’ College of Law pointed out that the typical percentage paid in fees for Chapter 11 bankruptcy cases is approximately two to four percent of the assets of the company filing for bankruptcy. In the case of Lehman Brothers, the $2 billion in fees is far less than that percentage when compared to the company’s $639 billion in assets. A bankruptcy attorney also noted that highly chaotic bankruptcies are typically more expensive than less complex cases. According to the 2011 court approved liquidation plan, creditors hoping to recover some of the money that they lost as a result of their dealings with Lehman Brothers are currently scheduled to receive a payment equaling approximately 18 cents for every dollar that they are… Continue reading
Interfaith Medical Center, a hospital located in Brooklyn, will shut down January 2014. The closure follows about a month of negotiation between the medical center’s creditors and unions along with New York officials and the center’s managerial staff. Interfaith hospital had filed for bankruptcy December 2012, but the negotiation was unable to come to an alternative solution for the closing of the hospital. The board of executives at the hospital attempted to keep the medical center open at least throughout the holidays as transferring patients during the season could prove difficult. Some of Interfaith’s outpatient services have already been approved for transfer to another medical center in good standing. More than 1,000 workers were to be laid off, and a large majority of them were union employees. Interfaith Medical Center had reported large losses due to operations in its financial disclosures. Since the medical center filed for Chapter 11 bankruptcy, it reported nearly $30 million in losses due to operations, ending with nearly $200 million in liabilities after all of the center’s assets had been calculated. The hospital had already paid more than $9 million in legal fees to handle its lengthy bankruptcy case. Companies such as the Interfaith Medical… Continue reading
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