High Profile Judgment against Gawker Media Group Illuminates the Bankruptcy Process

When The Wall Street Journal (WSJ) reported that Univision Communications, Inc. won a court-administered auction of assets belonging to Gawker Media Group (08.16.16), I thought this case perfectly illustrated how the Chapter 11 bankruptcy process works. For example …

A Single or Series of Disastrous Financial Incidents Disrupts a Company
In this case, a court order to pay a $140 million court award to Hulk Hogan—following his invasion-of-privacy suit against the media outlet—led to a very costly legal battle and outcome. This judgment followed a series of prior legal claims that also weakened the company.

The Debtor Files for Financial Relief
Gawker Media Group filed for Chapter 11 bankruptcy relief. When a Chapter 11 bankruptcy petition is filed, the court appoints a bankruptcy case trustee to oversee the process. The bankruptcy trustee works with the debtor and/or debtor’s attorney to review company assets, assess liabilities, review creditor claims and decide whether and how assets will be liquefied (sold and distributed) to repay creditors. The bankruptcy plan typically relieves the debtor of a portion of financial obligations while also structuring options to repay creditors.

Before the trial, Gawker founder Nick Denton estimated the company’s value at $250 million, but during the proceedings, the jury was told the company was worth $83 million. The bankruptcy trustee’s job was to review all financial data provided to the court and assess all submitted documentation to determine the accuracy of claims about debtor assets.

The trustee typically works with the debtor’s attorney to ensure that secured creditors are repaid and non-secured debt is appropriately resolved according to the debtor’s ability to pay.

In this case, Gawker listed 20 unsecured creditors, including Mr. Hogan.

The Court Sets a Date for Auction of the Debtor’s Assets

After assets are established, the bankruptcy trustee schedules an auction to transform liquifiable assets into funds to repay creditors. In this case, publisher Ziff Davis offered $90 million for Gawker, “but withdrew its offer based on the price and terms set by the court.” In the end, Univision bid $135 million, according to the WSJ report, and will not be responsible for payment of the Hogan lawsuit.

The Bankruptcy Trustee Reviews the Auction Results and Decides Whether to Approve the Bid(s)

At the time of the WSJ report, the trustee still had to approve the sale. After the terms of a bankruptcy sale are made public, and before the judge issues a final decree, the creditors (secured and unsecured) are given an opportunity to review and object to details of the sale. The bankruptcy trustee gathers all creditor responses, then makes recommendations to the court. Finally, the bankruptcy court judge makes the decision to approve the bankruptcy and liquidation.

In the above case, “proceeds from the sale will be used to pay Gawker’s creditors, finance further litigation costs, and cover whatever damages may ultimately be leveled following appeals,” wrote Lukas I. Alpert in WSJ.

Resolution of this Case

Final details would be determined by the courts. In prior court action (before the Chapter 11 corporate bankruptcy filing), “Mr. Denton (Gawker founder) was found personally liable for $10 million of the Hogan judgment and jointly liable, along with former Gawker editor A.J. Daulerio, for $115 million of the verdict levied against the company.” Mr. Denton then sought personal bankruptcy protection earlier this month to freeze collection actions from Hulk Hogan.

For more information on this case, read the WSJ article in full. If you are contemplating a personal bankruptcy (Chapter 7 or Chapter 13) and would like information to determine whether bankruptcy is the right option for you, feel free to Solomita Law for a free consultation.

Solomita Law Offers Free Debt Relief Tele-seminar Thursday, April 7, 7 pm

Solomita Law Teleseminar on iphone screenWe know that it’s not always easy to discuss personal financial matters, particularly when they involve debt. Many people struggling with debt believe there is no way out, so they avoid seeking advice until monetary situations become even more dire. Often, they can’t pay off their debts without outside help. To answer frequently asked questions about debt relief and bankruptcy, Solomita Law will host an informational tele-seminar. Registration is free and easy.
Once registered, participants simply need to telephone our conference call line at 7 pm, Thursday, April 7, 2016.


Debt Relief Strategies and Bankruptcy Options Tele-Seminar
REGISTER NOW  SolomitaLaw.com/register-for-event
Participants may listen in and/or ask questions in the privacy and convenience of their own homes. During this 45-minute tele-briefing, participants will:
  • Get answers to questions about the bankruptcy process and how it works.
  • Find out who is a candidate for a bankruptcy petition.
  • Learn how Chapter 7 and Chapter 13 petitions enable debtors to get a fresh start.
  • Have the opportunity to ask questions.
  • Learn more about how the legal system works.
  • Find out how to set up a free private consultation to discuss their individual concerns.

This tele-session is designed to help people struggling with debt and/or asking questions such as:

  • How can I get out of debt?
  • Will I lose my home in a bankruptcy filing
  • Is there any way to protect my assets?
  • Should I use my retirement funds to pay off my debts?
  • How can I get creditors to stop calling me?
Note: The information presented in this tele-seminar will be provided for educational purposes regarding options available for dealing with debt. This seminar is not intended to provide legal advice related to individual situations. For specific legal advice, please contact a qualified attorney to discuss your individual needs and circumstances.

How Bankruptcy Affects Foreclosure Proceedings

If your mortgage loan is in arrears, your lender may pursue foreclosure options against you. If the lender is successful in its foreclosure attempt, the lender will be able to retain the property and remove the homeowners who have been foreclosed on. Bankruptcy is a tool that can be used to prevent foreclosure.

If your home is involved in a foreclosure action, bankruptcy can temporarily hold off your creditors. As long as your bank has not yet obtained a court-ordered judgment enabling the mortgage holder to take your home, the process of bankruptcy will stall the sale.

When you file a bankruptcy petition, an automatic stay, which prevents creditors from pursuing action against your property, will immediately go into effect. Not all debtors will be able to save their home from foreclosure and bank sale. But while your bankruptcy petition is before the courts, you may remain in your home and the automatic stay will remain in effect.

How does an automatic stay work?
The automatic stay stops all creditors from proceeding against a debtor to recover claims that arose before the bankruptcy filing. During the stay (usually for the length of the bankruptcy proceeding), creditors are prohibited from any attempt to possess or exercise control over property of the debtor’s estate. Creditors may not create, perfect, or enforce any lien against the property, nor may they act to collect, assess or recover a claim that arose before the case. The stay also stops creditors from harassing you for payments and/or making additional claims during that time.

During the stay, the bank holding your mortgage will not be able to finalize the foreclosure process or sell your house from under you. The bankruptcy stay period will give you time to make other living arrangements. During that time, you and your attorney may apply for a loan modification that can lower your monthly payments, making it easier for you to remain in your home and protect the investment you made in it over the years.

When can foreclosure proceed?
Generally, a foreclosure cannot go forward until your bankruptcy is completed, unless the creditor files a motion to lift the automatic stay. If a motion to lift the automatic stay is filed, both sides will be allowed to argue why the stay should or should not be lifted. In cases where no motion is filed, the automatic stay will last until the case is closed. During Chapter 7 bankruptcies, however, most banks will wait out the process rather than expend resources to challenge the court-ordered freeze (automatic stay against creditor action). Under foreclosure, petitioners who file a Chapter 13 proceeding have a better chance of retaining their homes than those in Chapter 7. They will have a better chance of catching up on their arrears and might even get their monthly payment lowered if they participate in the Mortgage Modification Mediation Program.

 

 

Another Day, Another Scam: Beware of Con Artists

If you use email, frequent the Internet, have a telephone, or open your door to solicitors, it’s likely that you will be targeted by con artists at some time in your life. If you are very active on the internet, that likelihood seems to increase daily. Con artists are sharp, believable, and creative, and they want your money, usually right now. If it sounds too good to be true, it probably is … so says the office of State Attorney Jeffrey L. Ashton, Orange County, Florida.

Tips to Help You Avoid Con Artists’ Schemes …

Beware of terms, such as Cash Only, Secret Plans, Something for Nothing, Haste, Today Only and Last Chance in e-mails, Internet ads, or from telephone solicitors. If it sounds too good to be true, you are likely to be dealing with a scam artist. In addition ….

  • Work from home schemes are almost always scams.
  • Avoid “pay today” pressure tactics.
  • Get specifics from anyone who offers you something you are interested in.
  • When accommodations are included in a special offer (perhaps for a free vacation) check to make sure the hotel exists and to confirm payment and reservations.
  • Always ask about the refund policy before you buy. And get it in writing.
  • Read a contract before signing, and when in doubt, have someone you trust review it.

To Avoid Being Targeted by Online Scammers  …

  • Keep your private information private. Be very careful about information you share on Facebook and other social media. Provide as few details as possible in your online profiles, especially if they can be used to steal your identity.
  • Know the online merchants you deal with. Check out their websites and make sure you are using their official website when conducting online business.
  • Only download APPs (computer applications) from the Official Apps Store on your phone, not by clicking on an Internet ad.
  • Take nothing for granted. Always question out-of-this-world claims.
  • Make sure your transaction is secure. Look for “https” (note the s) in the URL in your browser and look for the lock symbol, as well.
  • Watch out for .exe files that can ruin your hard drive or collect information. Never open a file from a source you are not 100% certain you can trust.
  • Block inappropriate sites.

If you believe you are targeted by a con artist, contact your local State Attorney’s Consumer Protection Department. You can reach the State Attorney 9th Judicial Circuit (Orange County, FL) by ..

  • E-mail: FraudHelp@sao9.org
  • Phone: 407.836.2490
  • Mail: Orange County Consumer Fraud Unit, 415 N. Orange Avenue, P.O. Box 1673, Orlando, FL 32801

The State Attorney prosecutes criminal violations of Florida consumer protection statutes. For more information, visit the State Attorney’s consumer education website.

While the majority of businesses in Florida are honest and trustworthy, there is a small but very active minority of business people who are not the least bit interested in customer satisfaction and who resort to fraudulent, unfair or deceptive practices to maximize their profits. The Central Florida area is a favorite target of fly-by-night swindlers and itinerants who often pass through leaving a trail of unhappy victims before local law enforcement agencies are even aware of their presence.

In some cases, consumers will need to pursue their own case in court and seek legal advice from a qualified attorney. Solomita Law may be reached at 407-545-3625.

 

Welcome to the Solomita Law Blog

Alec Solomita Head Shot Not only have we just launched a new law practice, but I’m pleased to begin sharing thoughts, news, legal opinions and information with you through our new blog platform. If you like, you can share your own concerns with me, too, via the contacts form at our law practice website, www.SolomitaLaw.com. Also, feel free to share your comments with my readers and me right here on our blog site.

Mostly, the Solomita Law Blog will feature legal topics, but I’ll also address real life concerns. As an attorney, I want to help ensure that you get to enjoy your own life, so I’ve dedicated myself to helping protect my clients, their families, their assets, their reputations, and their legal rights. I want you to have the same protections and rights under the law that I would want for my own family.

Solomita Law focuses on bankruptcy and debt relief while also assisting clients with general legal services. Our experience extends to debt collection and debt negotiation, FDCPA (Fair Debt Collection Practices Act) violations, family law, immigration, and landlord/tenant law. I hope you’ll trust me to answer your legal questions because it’s my goal to help educate legal consumers and citizens. Feel free to submit your legal questions to me via the easy-to-use form at www.SolomitaLaw.com. Or, if you prefer, please reach out by telephone (407-535-3625) or email Staff@SolomitaLaw.com.

Over the years, I’ve worked with many clients who struggle with finances, fear the wrath of creditors, and want to clear a path for financial solvency. I’ve help them find their fresh start, sometimes through bankruptcy proceedings and other times through debt relief strategies. I’ve also helped numerous clients with their respective immigration issues. And I’ve assisted with basic legal concerns as well. If you have questions, I encourage you to learn what you need to know to make informed decisions.

Over my years of practice, I’ve become deeply familiar with the complicated process that the Federal Court requires when filing bankruptcy. To effectively represent clients, I work with each client to explore the specific issues relating to his/her/their qualification for a certain chapter of bankruptcy and evaluate whether and how their assets can be protected.

You might be wondering what kind of lawyer I really am, so I’ll tell you a bit about me:  I make it a point to communicate regularly with my clients and to be as accessible as possible throughout a legal engagement—from the pre-filing stage until a client receives a debt discharge through the courts, or depending on each individual case, reaches another appropriate legal remedy. I also treat clients the way I want to be treated: with honesty, sensitivity, integrity and a commitment to ensuring a positive experience. To learn more about my background, visit my About Page.

We are grateful for the opportunities this practice has already begun bringing people in need of legal support. We appreciate the many gifts of service and support that this new firm represents to me and my family. And we wish you a happy, healthy and prosperous year ahead. Stay tuned …

Frequently Asked Questions by Solomita Law Clients — Part ll

In our prior article, Solomita Law answered three frequently asked questions about bankruptcy. This article addresses other common queries.

Must I include every one of my debts in a bankruptcy filing or may I elect to pay off certain debts without applying for a discharge?
All debts must be included in the bankruptcy petition. Certain debts such as student loans and child support (among others) will not qualify for discharge. Other debts, like mortgage and vehicle loans, can be repaid during the bankruptcy and after the discharge is entered as well.

Can a creditor file a new claim after I have filed a bankruptcy petition? What happens to new claims?
When you file for a bankruptcy judgment, the courts issue an automatic stay that will prevent additional creditor actions during the time of bankruptcy. This can buy you valuable time to stay in your home while exploring your financial options, finding a new place to live, preparing your belongings for a move, conducting your move, and/or applying for a mortgage modification.

An automatic stay also stops creditors from harassing you for payments and/or making claims during that time. However, creditors may elect to pursue you for debts that were not discharged during bankruptcy. During bankruptcy, the judge may discharge non-secure debts in full or in part (depending on circumstances and rules of the bankruptcy chapter under which you qualify). If debt remains, the judge also may establish a plan and order you to continue paying secured debts and non-dischargeable debts. Generally, the plan will be based on what the court determines you can afford to pay based on the total you owe and will establish a three-to-five year payment plan.

Will I lose my home if I file bankruptcy?
The answer depends on your mortgage history, the state in which you reside and the bankruptcy chapter under which you file. If you file under Chapter 13 in the State of Florida where Solomita Law operates, you have a good chance of keeping your home. The bankruptcy court’s Mortgage Modification Mediation Program has proven to be very successful for debtors in the Central Florida area. This program can help make your payments more affordable so you can stay in your home—particularly if you continued to make regular, on-time mortgage payments before filing for bankruptcy.

Will I be allowed to keep my furniture, car or other personal property?
The court provides each debtor with exemptions that they can use to protect their assets. If the exemptions used do not shield the full value of your assets, as the debtor, you will have to repay the unexempt amount to the Court or surrender possession of the unprotected asset. Please contact Solomita Law for further information on this topic.

Can I sell or transfer property before filing bankruptcy?
The courts will look at your financial transactions over the year prior to your bankruptcy to ensure those transactions did not occur with intent to commit fraud. If, for example, you sold a car six months earlier, and used the money to pay attorney fees or to purchase or repair an old car and use the remaining money to continue paying your bills, the court may consider those transactions an appropriate part of your debt management plan.

If you are considering a bankruptcy petition, speak to an attorney who can help you protect your assets and your standing in court. It’s important to make informed decisions before selling or transferring property so you do not jeopardize your opportunity to discharge debts through bankruptcy proceedings.

For more information, contact Solomita Law at 407-545-3625, or send email to Staff@SolomitaLaw.com. We will respond to your questions as soon as possible.

Frequently Asked Questions by Solomita Law Clients — Part l

Many people under financial duress avoid filing for bankruptcy because they don’t understand how bankruptcy works, don’t know where to turn for information, or fear that they will not be able to live a normal life after bankruptcy. In fact, bankruptcy law provides a means for recovering from excessive debt, and many (possibly even most) people who qualify to file bankruptcy wish they hadn’t waited so long.

Below, Solomita Law provides answers to three of the most frequently asked questions from clients considering bankruptcy.

Will I be free and clear of debts if the court approves my bankruptcy filing?

Not all debts are dischargeable through bankruptcy. Typically, in Chapter 7 bankruptcy, qualified debtors may be released from all unsecured debts. Under Chapter 13 bankruptcy filing, a debtor may be relieved of certain debts, depending on individual circumstances,, and in general, most debts managed under Chapter 13 include a repayment plan that allows the borrower more affordable payments each month, until those debts are paid, typically within three to five years.

Recent tax debts, as well as child support, criminal restitution and student loans will not be discharged through bankruptcy court; and, in certain cases, the Court may order a borrower to repay these debts in full during the course of the bankruptcy.

How can I protect my assets under bankruptcy?
Your ability to protect assets under rules of law depends on your individual case and the bankruptcy chapter under which you qualify for relief. For specific advice on the merits of your case, speak with a qualified bankruptcy attorney.

Certain assets, such as Individual Retirement Accounts (IRAs) are protected under 11 U.S.C § 522(d) and cannot be involuntarily used to repay creditors in a bankruptcy. Do not allow a creditor to harass you into using your retirement savings to pay a debt! Creditors are not allowed to demand or place a lien against your retirement savings. Varying levels of home equity and motor vehicles (depending on their monetary value) also may be protected from creditors provided that payments are not in arrears and continue to be made regularly according to your loan agreement.

Is there any way to stop creditors from harassing me through bankruptcy?

Bankruptcy court offers debtors relief from creditor harassment by order of an “automatic stay” that goes into effect when a bankruptcy petition is filed. The automatic stay essentially freezes your estate in time and protects you against further creditor actions while your attorney presents your case and advocates on your behalf with the bankruptcy trustee and judge.

The automatic stay stops a creditor from proceeding against a debtor to recover a claim that arose before the bankruptcy filing. During the stay (usually for the length of the bankruptcy proceeding), creditors are prohibited from any act to obtain possession of property of the debtor’s estate or to exercise control over the property of the estate. Creditors may not create, perfect (complete), or enforce any lien against the property, nor may they act to collect, assess or recover a claim that arose before the case.

After a bankruptcy discharge or plan is entered by the Court, the automatic stay is lifted; at that point, creditors must abide by the terms established by the judge. In some cases, debts may be entirely discharged (eliminated). In other cases, the court will establish a debt repayment plan based on the court’s judgment of your ability to pay.

Watch for answers to other common questions in Part II of this article. Or, if you are considering filing bankruptcy and wish to discuss your needs, feel free to contact Solomita Law at 407-545-3625 or send email to Staff@SolomitaLaw.com. We will respond to your questions as soon as possible.

Understanding Bankruptcy Options

Dreamstime Image 198174

Speak with a qualified attorney to help assess your options under bankruptcy laws.                       Photo courtesy: Dreamstime.com # 198174

Positioning Yourself for a Fresh Start through Bankruptcy

Under Title 11 of the United States Code, bankruptcy laws were established to assist financially distressed individuals and organizations with debt relief. After a bankruptcy has been granted and debts have been discharged, debtors are positioned to gain stronger financial footing, and repay debts, such as mortgage and vehicle loans, on more affordable terms. The bankruptcy positions them to make a fresh start.

Bankruptcy provides for the reduction or discharge (elimination) of various types of debt. Depending on individual circumstances involved, the Court may discharge the entire consumer debt (as in a Chapter 7 filing) or provide a plan for repayment of non-dischargeable debts over time (as in a Chapter 13 filing).

To determine the chapter of bankruptcy for which you qualify, you must fill out a form called the “Means Test” and provide details about your income and expenses, based on your personal records. Some information needed to complete the form comes from the Census Bureau and the Internal Revenue Service (IRS). For questions related to the means test, contact Solomita Law or email the United States Department of Justice at ust.mt.help@usdoj.gov

ABOUT THE BANKRUPTCY CHAPTERS

The bankruptcy chapters address the financial needs of different types of entities and employ different qualification criteria. While Solomita Law focuses our practice on reducing stress and uncertainty associated with Chapter 7 and Chapter 13 bankruptcy filings for our clients, we are happy to share information about other bankruptcy chapters, as well. Below are short summaries of issues and options addressed by each bankruptcy chapter.

Chapter 7 enables full discharge of unsecured debts, such as credit cards and personal loans. Secured debt, such as a real estate loan or vehicle loan, typically remains unaltered, meaning that the property remains in the borrower’s possession as long as timely payments are being made. Primarily, Chapter 7 is available to individuals with business debts as well as corporations when they meet certain income requirements.

Chapter 9 deals with reorganizing of municipalities and government owned entities.

Chapter 11 was designed to help a business entity reorganize debts to maintain business viability and pay creditors over time. This is the most comprehensive chapter of the Bankruptcy Code, with reorganization options such as discharging some debts, repaying others, and restructuring the remainder. Although individuals may file for Chapter 11 relief, the relatively high filing fees and administrative costs lead most individuals to favor Chapter 7 or Chapter 13 bankruptcies,

Chapter 12 facilitates restructuring of debts for family farmers.  Only family farmers are eligible and this chapter functions in a similar way (but not exactly comparable) to Chapter 13.

Chapter 13 is reserved for individual debtors (not businesses). It permits the discharge of some debts, as well as the repayment of others across a three-to-five year time frame.  In some cases, a Chapter 13 filing will restructure principle payments of secured debts, or may enable discharge certain debts in full.  Only individuals who meet income and debt qualifications (according to the Means Test) are permitted to file under this chapter.

Finding Bankruptcy Services in Your Area

For general assistance in filing for bankruptcy relief, the clerk of your local bankruptcy court or your local state Bar Association may have information regarding attorneys and/or organizations offering bankruptcy related services on a reduced fee or pro bono basis. However, we are prohibited from providing specific legal advice before conducting a private consultation about your individual case.

The Official Bankruptcy Forms can be found on the Administrative Office of the U.S. Courts Web site.

For more information, contact Solomita Law at 407-545-3625 or send email to Staff@SolomitaLaw.com. We will respond to your questions as soon as possible.

Welcome to the Solomita Law Blog

Alec Solomita Head Shot Not only have we just launched a new law practice, but I’m pleased to begin sharing thoughts, news, legal opinions and information with you through our new blog platform. If you like, you can share your own concerns with me, too, via the contacts form at our law practice website, www.SolomitaLaw.com. Also, feel free to share your comments with my readers and me right here on our blog site.

Mostly, the Solomita Law Blog will feature legal topics, but I’ll also address real life concerns. As an attorney, I want to help ensure that you get to enjoy your own life, so I’ve dedicated myself to helping protect my clients, their families, their assets, their reputations, and their legal rights. I want you to have the same protections and rights under the law that I would want for my own family.

Solomita Law focuses on bankruptcy and debt relief while also assisting clients with general legal services. Our experience extends to debt collection and debt negotiation, FDCPA (Fair Debt Collection Practices Act) violations, family law, immigration, and landlord/tenant law. I hope you’ll trust me to answer your legal questions because it’s my goal to help educate legal consumers and citizens. Feel free to submit your legal questions to me via the easy-to-use form at www.SolomitaLaw.com. Or, if you prefer, please reach out by telephone (407-535-3625) or email Staff@SolomitaLaw.com.

Over the years, I’ve worked with many clients who struggle with finances, fear the wrath of creditors, and want to clear a path for financial solvency. I’ve help them find their fresh start, sometimes through bankruptcy proceedings and other times through debt relief strategies. I’ve also helped numerous clients with their respective immigration issues. And I’ve assisted with basic legal concerns as well. If you have questions, I encourage you to learn what you need to know to make informed decisions.

Over my years of practice, I’ve become deeply familiar with the complicated process that the Federal Court requires when filing bankruptcy. To effectively represent clients, I work with each client to explore the specific issues relating to his/her/their qualification for a certain chapter of bankruptcy and evaluate whether and how their assets can be protected.

You might be wondering what kind of lawyer I really am, so I’ll tell you a bit about me:  I make it a point to communicate regularly with my clients and to be as accessible as possible throughout a legal engagement—from the pre-filing stage until a client receives a debt discharge through the courts, or depending on each individual case, reaches another appropriate legal remedy. I also treat clients the way I want to be treated: with honesty, sensitivity, integrity and a commitment to ensuring a positive experience. To learn more about my background, visit my About Page.

As Solomita Law wraps up 2015, we are grateful for the opportunities this practice has already begun bringing people in need of legal support. We appreciate the many gifts of service and support that this new firm represents to me and my family. I wish you a wonderful holiday season and a happy, healthy and prosperous new year. Stay tuned …