Maker of Twinkies files for bankruptcy

Hostess Brands, the maker of such iconic brands as Twinkies and Ding Dongs, has asked a federal bankruptcy judge for permission to cease its operations and liquidate the company’s assets underChapter 7 bankruptcy. While this may not mean the end of the company’s beloved snack cakes — the brands likely will be sold at auction — it will mean the end of employment for nearly 18,000 Hostess employees. Hostess has had financial challenges for some time. The company first filed for bankruptcy protection in 2004 and then again in January 2012. Those earlier bankruptcy proceedings sought to reorganize the company’s debt under the initial filings. The company’s most recent filing seeks asset liquidation under Chapter 7. It comes after a failed effort to gain concessions from union workers. When union negotiations broke down, Hostess unilaterally imposed cuts in wages and benefits. That action resulted in a strike at 24 of the company’s 33 plants, and striking workers refused to return to work by a Nov. 15 deadline set by the company. Hostess officials now say the company does not have the financial resources to continue operations in the face of the strike. Chapter 7 for businesses is a measure taken… Continue reading

Protections against mortgage fraud could cost New Yorkers

New York may be one of the best states for homeowners facing foreclosure because of legal protections against mortgage fraud. However, those protections are costly to lenders and may end up costing New York borrowers more money, too. The foreclosure process in New York is the longest in the nation, taking on average 1,089 days to complete. A backlog of foreclosures has stalled the state’s housing recovery and has kept housing prices low. Now, the Federal Housing Finance Authority is considering fee increases for New York borrowers to compensate Fannie Mae and Freddie Mac for costly foreclosure delays. The good news is that the state’s lengthy foreclosure process means New Yorkers in default of their mortgages have multiple opportunities to try to save their homes from foreclosure. These options include filing for Chapter 13 or other forms of bankruptcy, a mortgage loan modification or a short sale. Chapter 13 bankruptcy allows a homeowner to reorganize debts into a court-supervised repayment plan and make manageable payments over time. For individuals with a steady source of income, Chapter 13 can be an excellent option for eliminating some debt, reducing interest payments and making a fresh financial start. By sticking to the Chapter 13 repayment… Continue reading

Chapter 7 for SunTech to be dismissed after negotiations

Suntech Power Holdings, which is a Chinese-owned company that is registered in the Cayman Islands, was placed in involuntary Chapter 7 bankruptcy after U.S. investors petitioned the southern district court of New York. The petition came as a result of unpaid convertible notes amounting to $1.6 million. The notes were due the end of 2013 and remained unpaid. This prompted the U.S. investors to file the bankruptcy petition. However, recent negotiations with the note holders resulted in an announcement Friday that Suntech will be dismissing the Chapter 7 filing. Instead, they will be filing Chapter 15 bankruptcy in the company’s Caribbean base. This will allow the company to remain in business while proceeding with liquidation and restructuring as regulated in the U.S. bankruptcy code. If Suntech does not file for Chapter 15 by the allotted time, which is Feb. 25, the agreement will be void. The Chapter 15 filing will result in recognition of the restructuring in the Cayman Islands to be entered into the U.S. Bankruptcy Court. The deadline for that recognition to be filed in the U.S. Bankruptcy Court is May 31, with a Dec. 31 approval date. Bankruptcy attorneys in New York can tell you that Chapter… Continue reading

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