Tag: Bankruptcy

Who Is Targeting the Jazz Clubs?

 

Josephina Jillian Jones (3J to everyone) is a bankruptcy lawyer. She and her mentor and law partner Bill Pascale are two of the best bankruptcy lawyers in Kansas City. It is usually not very exciting, but they provide a needed service.

”Automatic Stay,” by Mark Shaiken, is a novel featuring these two and a bankruptcy case that became way too exciting. Their new clients, Adam and Bey Rapinoe own a nightclub chain featuring Kansas City jazz: BJB (Bring Jazz Back) LLC. From 1920 through 1950 Kansas City, MO, was one of America’s four jazz capitals. The Rapinoes started their business to revive Kansas City’s tradition in that most American of music – jazz.

They exceeded all expectations until Covid hit in 2020. The crowds stayed away. By 2023 they had run through their cash. Unable to continue paying their loan, they decided to take shelter in bankruptcy.  They think they can turn things around if they can restructure the loan. It is pretty standard stuff for J3 and Pascale.

A Collision of Two Unscrupulous People

 

Many contemporary novels have been written about lawyers and the law.. Certain types of law lead to exciting drama, especially criminal cases. Bankruptcy law seems an unlikely source for gripping fiction.

“Fresh Start: A 3J Mystery,” by Mark Shaiken, is proof it can be done. It is tightly written, tautly paced, and absolutely absorbing.

Quincy Gunn Witherman builds and operates high-rise office buildings. His buildings are high-end, with 95 percent occupancy and blue-chip tenants. As with most developers, he is highly leveraged.  While his income is solid his properties dropped in value due to a general market downturn two years earlier. The market has stabilized and the buildings again appreciating.

Is Borden Milking the System?

 

The demand for cow milk in the US has been decreasing since the 1970s. Europe and Australia are similarly affected by the popularity of milk substitutes, like almond milk and soy (for people who prefer to drink their beans). Consequently, milk prices have dropped to attract customers. Producers have yet to replicate their successful “Got Milk?” campaign from the 1990s.

At the same time, Borden, a major dairy producer, claims raw milk costs have risen along with transportation costs and other expenses. Employee pensions are due, though at least not all workers are unionized.

Jim Geraghty of National Review and Greg Corombos of Radio America are a bit surprised by House Speaker Nancy Pelosi and House Intelligence Committee Chairman Adam Schiff signaling they don’t plan to pursue impeachment of President Trump unless there’s a bipartisan consensus for it. They also look on sadly as New York City’s exorbitant taxes and hard left policies leave the city careening towards bankruptcy. And they crack a few pop-culture jokes but also weigh in on the serious issues as celebrities and elites around the country are charged with bribing colleges and universities to admit their kids under false pretenses.

Puerto Rico’s Bankruptcy: A Test Case for States

 

shutterstock_171180104When Congress overhauled the country’s bankruptcy law in 1984, it added a new section — Chapter 9 — to address municipal bankruptcies. States, however, were not included. Separate from philosophical considerations of state sovereignty, the Constitution (Article I, Section 10) is explicit: “No State shall … pass any … Law impairing the Obligation of Contracts.” The 1984 law explicitly treats Washington, DC and Puerto Rico on par with states for the purposes of bankruptcy law.

So now that Puerto Rico is insolvent, the island’s government is turning to the federal government for help. It passed a law restructuring its $73 billion in debts (it also owes $40 billion in pension obligations), but its creditors successfully sued in federal court to have the law overturned. Recently the US Supreme Court agreed to hear Puerto Rico’s appeal. Meanwhile, Democratic senators have introduced legislation to extend Chapter 9 protection to the island.

Republicans have so far resisted that call, labeling the move a “bailout.” This is hyperbole — creditors, not taxpayers, would take the hit — but the Republicans are correct on the merits. The island’s lenders took measured risks on the basis of the law as it was written; a retroactive rewrite would be both morally wrong and counterproductive. Just as importantly, what got Puerto Rico into trouble was profligacy, and Chapter 9 protection would do nothing to foster reforms. Absent changes to the island’s unsustainable spending and bloated public sector, it would only be a matter of time before Puerto Rico became insolvent again.