Judge to rule on Detroit bankruptcy petition on December 3
government's specific legal criteria for Chapter 9 bankruptcy. It's not clear why the judge opted to schedule a hearing to discuss his ruling verbally before issuing a written opinion. Most people involved in the case were expecting a written opinion, perhaps without warning. "It's unusual," said Laura Beth Bartell, a bankruptcy law professor at Wayne State University. "I have never heard of this. I don't know why he is doing that." Bartell said Rhodes "won't say anything in court that is not in his opinion" to avoid providing grounds for reversal on appeal. The city must prove it is insolvent, show it has obtained the state's legal authorization to file for bankruptcy and prove that it negotiated in "good faith" with its creditors or that it's "impracticable" to do so.
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continue Steven Rhodes' style='float:left;padding:5px' /> City lawyers argued during the eligibility trial that Detroit acted in good faith prior to the bankruptcy filing, but that negotiations were impractical because of the large number of creditors and an unwillingness on the part of union, retiree and pension fund negotiators to make concessions. Bruce Bennett, one of the city's lead bankruptcy attorneys, said in his closing arguments earlier this month that the city recognized it would be nearly impossible to negotiate with creditors, but decided to try anyway. "You absolutely can believe in your head that this is never going to work, but try anyway," he said. "And I think that is the situation in this case." With $18.5 billion in debt and liabilities, Detroit is the largest U.S. city to file for bankruptcy.
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Judge to rule Wednesday on American Airlines merger and bankruptcy plan
Some residents in wealthy Birmingham suburbs, who have septic tanks and arent connected to the sewer system, dont have to pay additional charges even though they get the indirect benefit of the county having clean water. Calvin Woods, president of the Birmingham Chapter of the Southern Christian Leadership Conference, said it was wrong that county officials didnt spread the pain of rate increases evenly. Unless youre going to put it across the board on everybody, youre still going to have a lot of trouble, Woods said. All of us live in the county. The case is In re Jefferson County, 11-bk-05736, U.S. Bankruptcy Court , Northern District of Alabama (Birmingham). To contact the reporter on this story: Martin Z.
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Big decision on Detroit bankruptcy coming Dec. 3
Bank for approximately $1.54 billion. Zachary A. Goldfarb and Michelle Boorstein The pope sharply criticized growing economic inequality and unfettered markets in a lengthy paper. Consumer confidence falls to 7-month low Associated Press Confidence in the economy fell in November to the lowest level in seven months, dragged down by greater concerns about hiring and pay in the coming months. More business news He presided over a nine-day trial that ended Nov. 8. Unions and pensions funds claim Detroit isnt eligible for bankruptcy because it failed to hold good-faith negotiations before the filing in July. The city, however, insists it did enough during the preceding four weeks.
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LEGAL TIP: You may need to file for bankruptcy before filing for divorce
Bankruptcy Judge Kevin Gross today approved a faster-than-normal sale process for the company, which filed for bankruptcy Nov. 22 in Wilmington, Delaware . Under Chapter 11 of the U.S. Bankruptcy Code , companies are usually required to try to organize an auction before selling assets. It is unusual to have, obviously, a sale without bidding procedures and an auction, Gross said. Fisker justified the fast pace of the case by claiming the company and federal officials conducted an extensive marketing effort before the bankruptcy was filed, according to court papers.
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Fisker Bankruptcy Judge to Consider Approving Sale Jan. 3
There are three items on the agenda, all related: The AMR/American motion that the settlement of the U.S. Department of Justice antitrust lawsuit doesnt significantly change the previously approved plan of reorganization. If the judge agrees, AMR creditors and shareholders wouldnt be asked to vote again on the plan. The request from plaintiffs in a private antitrust lawsuit for a temporary restraining order. If the judge approves, AMR/Americans exit from bankruptcy and merger with US Airways would be put on hold. The AMR/American motion asking for an order to allow them to consummate the merger with US Airways. If the judge agrees, AMR/American would merge in the near future with US Airways as AMR/American exits bankruptcy, on or about Dec. 9. The hearing will be held in his courtroom in lower Manhattan.
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Jefferson County's Bankruptcy Left Few Winners
And after divorce, domestic support obligations such as alimony and child support are not dischargeable during bankruptcy. So its important that you contact us today at (206) 878-8777 or visit www.marineviewlaw.com if you think you may need our assistance. (Marine View Law & Escrow Attorney) was always there when I had questions or concerns. If I ever had another legal matter I would go back to (Marine View Law & Escrow Attorney). - Satisfied Client of Marine View Law & Escrow We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.
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Today's article will emphasize the importance of discussing with an attorney the possibility of bankruptcy prior or duriEquitable ng a divorce, so as not to overshadow or harm your overall divorce result. There are a certain considerations to discuss with your attorney. These are issues in your divorce proceeding and issues in bankruptcy that may have the ability to alter the outcome of your divorce agreement. First, and this one is easy, make sure any attorney you retain to represent you in a divorce matter has a working relationship with a bankruptcy attorney well-versed in bankruptcy as it relates to divorce matters. You would want to discuss at a minimum how or if a bankruptcy proceeding by one or both spouses either before, during or after will affect the divorce and what remedies will be available to you. 
Its clear that bankruptcy pays, generating about 79% of those fees, according to a recent report from the Judicial Conference of the United States . The conferences bankruptcy committee recommended the sale motion fee, weighing the amount tied to the value of the sale before deciding on a flat fee, according to a committee report from September that Bankruptcy Beat viewed. The fee will specifically apply to motions to sell assets free and clear of liens, encumbrances and interestsa lawyerly way of saying that the buyer will be able to leave behind anything tying up the assets in bankruptcy. Put even more simply, such sales essentially cleanse the assets, and its rare for companies to seek to sell assets without such a cleansing. Thats really one of the big benefits of a bankruptcy sale, Mr. Eisenbach told Bankruptcy Beat. Adding the fee comes on top of other administrative fees companies already pay in bankruptcy, from a $1,167 filing fee and $46 administrative fee charged to file a Chapter 11 petition to a new $25 claim-transfer fee . 
Although Fisker still owed some US$168 million ($183 million) to the Department of Energy , Hybrid Tech Holdings was able to come to an agreement with the US government, purchasing Fiskers loan for just US$25 million ($27 million). In 2010, the US Department of Energy awarded Fisker a US$529 million ($577 million) green-energy loan, as part of the Obama administrations efforts to stimulate advanced vehicle development. Fisker collected more than US$190 million ($207 million) until February 2012, when the US government froze the loan because Fisker had failed to meet the performance targets set out for the company under the loan agreement. A subsidiary of Hybrid Technology, Hybrid Tech Holdings LLC has also purchased Fiskers assets for US$8 million ($8.7 million), saying the sale is the first step towards eventually restarting production of Fiskers Karma plug-in hybrid . Fiskers chief restructuring officer, Marc Beilinson, released a statement on its bankruptcy and subsequent sale. After having evaluated and pursued all other alternatives, we believe the sale to Hybrid and the related Chapter 11 process is the best alternative for maximising Fisker Automotives value. Fisker produced the rear-wheel-drive Karma from 2011 to 2012, rivalling the likes of the Mercedes CLS , Porsche Panamera , and Tesla Model S . 
Rio de Janeiro Judge Gilberto Matos did, however, accept bankruptcy protection for company's Brazil-based units OGX Petroleo e Gas SA and OGX Petroleo e Gas Participacoes SA. OGX sought court protection from creditors on October 30 after it failed to convince them to refinance more than $5.1 billion in obligations, in Latin America's largest-ever corporate bankruptcy filing. Marcio Costa, a lawyer for OGX, told Reuters that the judge's decision would complicate the recovery process, adding that the company plans to appeal the ruling. "This decision disrupts the judicial recovery process, allowing some lenders to seek debt payments in Brazil and Austria," Costa said. "Those funds were raised abroad to be used in Brazil. 
Singer Lauryn Hill was sentenced to three months in prison in May. She told a judge she intended to pay taxes, but it was just a question of when.' style='float:left;padding:5px' /> While O.J. Simpson has known bigger legal problems, delinquent taxes are on the list. The former football star, who's serving a long prison sentence in Nevada, owed the IRS and the state of California hundreds of thousands of dollars, according to court documents. Comedian Sinbad racked up a large unpaid tax bill, owing $8 million to the IRS for income from 1998 to 2006, according to an IRS court filing in 2012. California officials also reported that he owed the state $2 million. After filing for bankruptcy and selling his home, Sinbad used the tax troubles as material for a reality show. Actor Nicolas Cage revealed in 2010 that he owed $14 million in back taxes, which he has been working to pay off since. A federal tax lien filed last year said he owed $6.2 million from income in 2007. Wesley Snipes walked out of a federal prison in April after serving a tax evasion sentence that began in December 2010. 
"Those funds were raised abroad to be used in Brazil. The judge didn't take that into consideration." OGX has two foreign subsidiaries, OGX Internacional and OGX Austria. The judge denied the request for those units on the grounds that bankruptcy protection should be decided in the countries where they are based, according to a copy of the judge's decision. For the Brazilian operations, the judge's decision gives OGX 60 days to come up with a restructuring plan. OGX creditors including California-based bond fund Pacific Investment Management Co (PIMCO) and New York-based investment fund BlackRock Inc (BLK.N) will then have 30 days to endorse or reject the plan. OGX's sister company shipbuilder OSX Brasil SA (OSXB3.SA) filed for bankruptcy protection on Nov 11. The company is expected to get court protection from creditors. Batista, 56, a dealmaker who once boasted he would become the world's richest man, has seen his personal fortune plunge by more than $30 billion in the last 18 months as investors punished the share price of his listed companies. 
Most of the county's current $3.14 billion in sewer debt is due to the public corruption of former county officials - some of whom are still in prison - so creditors should agree to lessen the debt owed even more than they already have, residents said. One attorney for residents said they will appeal the judge's order confirming the plan. Attorneys for another group of residents were considering the option. Under Jefferson County's bankruptcy exit plan approved by Bennett, sewer creditors agree to shave off more than $1.4 billion in sewer debt and the county will refinance the nearly $1.8 billion in remaining debt over the next 40 years. The county's plan calls for rate hikes of 7.41 percent for each of the first four years and then no more than 3.49 percent a year for the foreseeable future in order 
Even though Alydian officials have spent roughly $4 million on their bitcoin mining rigs, designed to solve complex mathematical algorithms in order to mine the virtual currency, the companys system isnt fully deployed yet, according to papers filed with the U.S. Bankruptcy Court in Seattle. Alydian officials who put the company into Chapter 11 bankruptcy on Nov. 1 have said that some of its manufacturing parts are still en route from Taiwan. So far, Alydian has only mined about 3,041 bitcoins, according to a recent tally filed in the New York lawsuit. The concept for Alydian was developed about a year ago as the market for bitcoinsa virtual, unregulated currency thats now accepted as payment by some merchantsgained credibility. 
While the lion's share are paid to firms as the case goes on, they nonetheless remain subject to court approval at the end. In large cases like Kodak's, judges often tap examiners to pore over the bills and offer recommendations as to whether they are reasonable. Examiners flag expenses that seem inappropriate or inflated and try to get firms to reduce them. If sides can't reach a compromise, the dispute goes to the judge. In his report, Stern said Kodak fees were reduced by about $8.2 million through consensual deals. 
That figure is down from a peak of more than 1.5 million in 2010. Filing for bankruptcy comes with consequences, though, including difficulty securing loans. The fallout can, in some cases, affect college financing. "Parents are ineligible to borrow from the PLUS loan program for five years after their discharge of debts in bankruptcy," says Shane McClelland, an attorney based in Columbus, Ohio. [Learn more about federal student loans .] In addition to Parent Direct PLUS Loans , private loans may also be out of the question for as long as seven to 10 years, depending on the lender. That may sound discouraging, but in reality the effect on students is minimal, as those considering bankruptcy already have bad credit, McClelland says. 
The extent of those powers is at issue in a new case before the Supreme Court, prompting the ABAs brief. In addition to arguing for the legality of bankruptcy judges final judgments, the ABA also raises a more practical concern: the already very crowded dockets of U.S. district courts, which already face funding and personnel shortages. Limiting bankruptcy judges powers would have stark consequences for district courts workload, the ABA argues, pointing out that nearly 1.11 million bankruptcy cases were filed in the year ending Sept. 30. 
It is likely to result in cuts to pensions and health-care benefits, and the sale of city assets ( possibly even its fine art ). Cuts to retiree benefits have the public-employees unions up in arms. The unions and retirees claim the bankruptcy is an attempt to get around a ban on pension cuts in the state constitution. During the trial their representatives argued that the state did not negotiate in good faith prior to declaring bankruptcy, as is required by law. The city disagrees. 
At a time when the Ford Crown Victoria was still the dominate police cruiser, the E-7 seemed like a prop from RoboCop brought into reality. Carbon Motors pledged the E-7 would offer law enforcement every protection known, from armored doors to rear-hinged doors and back seats designed for handcuffed prisoners. The BMW diesel was supposed to provide superior fuel economy, and Carbon vowed an E-7 would last twice as long in service as a normal cop car up to 200,000 miles and beyond 
You havent really seen the effect of whats going to happen yet, Christopher Ward , the co-chair of Polsinellis bankruptcy practice, told Bankruptcy Beat. However, Mr. Ward said the new fee guidelines were a very hot topic of conversation among restructuring pros at a widely attended bankruptcy conference in Atlanta, held Oct. 30 to Nov. 2. That conversation included debate as to whether bankruptcy judges will accept the new fee guidelines, which arent automatically legally binding but rather will influence when and how government watchdogs, called U.S. trustees, object to fee requests. There was a definitely a line of thinking among restructuring professionals that some judges may not accept the guidelines as the law of their court, Mr. Ward said. 
"I was told that a bankruptcy within 5 years has no appeal - there is nothing they could do and I should talk to my financial aid department," one student wrote on a financial aid forum in 2010 . "So I went in to the financial aid department. They told me I should appeal the direct loans again, or apply for a private loan. Direct Loans told me again there was nothing they could do, and to go back to financial aid. I feel like a 'Go ask your mother, go ask your father' game is going on." Trying to fund your education? Get tips and more in the U.S. News Paying for College center. Kelsey Sheehy is an education reporter at U.S. 
The second Indiana filing was by a subsidiary, ATA Airlines Inc. The company did not immediately respond to a request for comment. Repeat filings are not uncommon. About one-third of larger companies that file for Chapter 11 find themselves back in bankruptcy court within four years, according to research by Edith Hotchkiss, a professor at Boston College, who described the return debtors as "Chapter 22s." Rare are those that end up in court a third time. A paper by Edward Altman, a New York University professor, listed 10 companies that shared that unwanted distinction, including Trans World Airlines and retailers Grand Union Co and Levitz Home Furnishings Inc. But four times appears unprecedented, at least under the current bankruptcy code. Altman noted one four-timer in his 2009 paper, Trans Texas Gas Corp, but its first filing preceded what is considered the modern era of bankruptcy that began with legal changes in 1978. 
Pension Cuts Municipal unions and retired employee groups have argued that Snyder and other state officials pushed the city into bankruptcy court because that was the only way to skirt Michigans constitutional ban on cutting public worker pensions. Rhodes asked both the city and the unions and retiree groups to submit analyses of whether the definition of good-faith bargaining should be affected by labor laws . In its filing today, the union asked Rhodes to send his ruling to the Cincinnati-based Sixth Circuit because there are not enough cases that define such bargaining. Typically, bankruptcy court decisions are first reviewed by a district judge before going to the circuit court. Rhodes has said he would issue his decision on eligibility after all sides have submitted their analyses of good-faith bargaining. Those filings are due today. 
Its too drastic to consider, Mayor-elect Adam Sanchez, a 55-year-old Democrat, said in an interview. Theres room in this city budget to make the cuts that are necessary without going bankrupt. Desert Hot Springs would be the first community to seek court protection since Detroit did so in July. Two other California cities are in bankruptcy: San Bernardino, with a population of 210,000, and Stockton, whose 292,000 residents made it the biggest municipal case until Detroit. If it seeks Chapter 9 protection, Desert Hot Springs, about 110 miles (177 kilometers) east of Los Angeles , would be making its second pitch to a bankruptcy judge since 2001, when it couldnt afford to pay a legal judgment. The city exited bankruptcy in 2004. 
In a weekly publication, Moodys warned investors that Scranton could be facing the threat of default or bankruptcy thanks to a $20 million budget gap for the fiscal year that begins Jan. 1. The city is supposed to approve a new budget by Nov. 15, which would have to close that deficit to balance the budget. Without a balanced budget, the ratings agency warned that two financial institutions could withdraw from scheduled debt financing for the beleaguered northeastern Pennsylvania city. The resulting liquidity squeeze would leave the city with few options to meet its financial obligations, raising the threat of default or bankruptcy, warned Moodys analysts. 
First, filing a complaint may cause harm to the debtor even before service is perfected. Second, the alternative to dating violations from the filing of the complaint can become factually complicated. Third, there is no viable logic for 
As Mr. Batista and his advisers move to try to save the once-promising empire, the group is starting to drop the letter X. MPX changed its name to Eneva following the entrance of a new co-controller, German power company E.ON SE. OGX's shareholders will vote later this month on a new proposed name, Oleo e Gas Brasil SA. OSX is expected to follow suit. While the X world crumbles, executives close to Mr. Batista are pinning their hopes on the Tubarao Martelo oil field, which is expected to start producing oil for the first time later this month. It is still unclear how much Tubarao Martelo will be able to produce. And beyond that, OGX is still low in cash and needs some $150 million by January to maintain operations at the field. 
At least $850 million of these debts were issued as part of a syndicated loan organized by Brazil's banking giant Itau Unibanco Holding SA, as well as European banks ING Groep NV and Banco Santander, according to OSX statements. Instead, the bankruptcy filing is mainly a blow to the Brazilian government, which has poured loans into Mr. Batista's businesses through government-owned banks and investment funds. In the case of OSX, officials believed the company would help revive Brazil's shipping industry and create jobs. Even though mainly government creditors are on the hook, the bankruptcy has implications for private banks. Spain's Banco Santander provided a guarantee to the loan issued by Caixa, and Brazil's Banco Votorantim issued a guarantee to the loans issued by BNDES, according to company statements. Prior to the filing, Brazil's government-backed Caixa and BNDES both agreed to extend the maturities on OSX loans coming due, giving Mr. Batista an important reprieve. Other OSX creditors that must now turn to Brazilian bankruptcy courts to recoup their money include suppliers, such as Spain's Acciona SA and Italian and Argentine conglomerate Techint Group, according to people familiar with OSX's borrowing. 
Creditors, who have objected to Detroit's bankruptcy, portrayed Dillon's assessment as evidence that the city rushed into court. If they can prove the city negotiated in bad faith, federal Judge Steven Rhodes could dismiss the city's bankruptcy, forcing Orr back to the bargaining table on debt and long-term obligations that have reached $18 billion. Earlier in the day, General Counsel Michael Nicholson of the United Auto Workers accused the city of refusing to enter proper negotiations, describing meetings with Orr's team as lectures. DAY 4: Mich. gov calls bankruptcy right decision "I have never, ever been involved in any negotiation where one side speaks," said Nicholson, whose union represents fewer than 200 Detroit library employees and fewer than 200 city retirees. Still, Dillon, who was treasurer until last week, insisted that bankruptcy was a last resort, echoing earlier testimony in the trial from Michigan Gov. 
"The recovery for the unsecured creditors was so low, I didn't know how anyone could practicably cut a deal and walk out of the settlement room." The former treasurer was called to the witness stand under a subpoena as Detroit retirees, unions and pension funds try to block the city from receiving court protection. He is expected back on the stand when the trial before U.S. Bankruptcy Judge Steven Rhodes continues on Thursday. Dillon played a key role in the lead up to Detroit's July 18 bankruptcy filing by serving on review teams that scrutinized the city's finances. In a July 9 email to Michigan Governor Rick Snyder that was cited in court on Tuesday, Dillon wrote that there were "creative options" for Detroit's public pension shortfall, but he testified on Tuesday that he did not pursue any of those solutions because the pension deficit was "relevant but not a driving factor" behind the city's trip to U.S. Bankruptcy Court. Detroit has $18.5 billion in debt and other obligations, which the city and state say includes a $3.5 billion unfunded pension liability, a figure that is disputed by bankruptcy opponents in the case. The opponents, who include the city's labor unions, retirees and pension funds, are trying to prove that Detroit officials failed to try to negotiate a deal with them and other creditors ahead of the July 18 bankruptcy filing. To be eligible for Chapter 9 municipal bankruptcy, Detroit must prove that it is insolvent, that it negotiated in good faith with its creditors or that there were too many creditors to make negotiations feasible. 
(BLK) and Pacific Investment Management Co. When some of the deposits hed valued at $1 trillion turned out to be duds, OGX lost 98 percent of its value and ran out of cash. You have to assume bondholders are at the bottom of the cash waterfall, Omar Zeolla, a corporate credit analyst at Oppenheimer & Co., said in a telephone interview in New York . The problem now is the time it might take. Failed Talks The bankruptcy protection process will put $3.6 billion of dollar-denominated bonds into default. The 2018 notes plunged 89.6 cents this year and are the worst-performing notes globally with more than $500 million outstanding, according to data compiled by Bloomberg. The companys $1.06 billion of 2022 notes have fallen 75.6 cents on the dollar in the period. Michael Reid, a spokesman for Newport Beach , California-based Pimco, and Melissa Garville, a spokeswoman at BlackRock in New York, declined to comment. 
But Orr must OK anything the new mayor wants that requires money. "I think they're kidding themselves if they think they are going to regain financial control of this city," said Detroit-based bankruptcy attorney Kenneth Schneider. "Even after Kevyn Orr, there will be a financial advisory board that will maintain control of the city's finances indefinitely. The first part for any new mayor is to accept that and work with the state on how to right this city's finances." The AP left a message last week with Orr's office to ask how he plans to work with the newly elected mayor in January. Snyder has not endorsed a candidate, but after testimony last week in bankruptcy court, Snyder held firm in his decision to appoint Orr and keep him in place until Detroit emerges from bankruptcy and its finances are fixed. 
Markets closed New Equifax Risk Score Helps Lenders Minimize Bankruptcy Losses Bankruptcy Navigator Index 4.0 is Most Predictive Bankruptcy Risk Score to Date, With Improved Ability to Forecast Potential Consumer Bankruptcy Press Release: Equifax Inc. 14 hours ago 65.15 -0.0300 ATLANTA, Nov. 4, 2013 (GLOBE NEWSWIRE) -- Equifax ( EFX ) announced today the launch of its fourth generation Bankruptcy Navigator Index (BNI) score, its most comprehensive and predictive bankruptcy risk score ever. With BNI 4.0, lenders can make more confident risk decisions through significantly enhanced insights and predictability into potential consumer bankruptcy. "This is our most effective consumer bankruptcy risk score yet, providing deeper and more predictive insights driven by wider data and more powerful analytics," said John Cullerton, Senior Vice President of Product Innovation and Management with Equifax. "BNI 4.0 will give lenders the ability to predict and avoid potential consumer bankruptcies with improved performance and more consistent decisioning. 
Constitution, Orr said. That is a bit different from sacrosanct isnt it? Rhodes asked in response. Orr said it wasnt different because he also told people at the meeting that all creditors of the city, including employees and retirees, must be prepared to accept cuts. The bankruptcys opponents, including unions and retiree groups, are trying to show that Orr and state officials, including Governor Rick Snyder, acted in bad faith in filing the case under Chapter 9 of the U.S. Bankruptcy Code, which covers municipalities. Rhodes must decide whether the city is eligible to remain in bankruptcy court, where its protected from lawsuits and other legal actions that might disrupt reorganization efforts. Show Insolvency To remain in bankruptcy, the city must show that its insolvent, that its entitled under state law to file for bankruptcy, that it tried to negotiate with creditors or was unable to do so, and that it intends to file a plan to adjust its debts. 
Rosen has been conducting a series of closed-door talks with creditors and has appointed his own team of mediators to help. Kenneth Klee, a bankruptcy attorney for Jefferson County, Ala., which is in bankruptcy, questioned whether it will be productive for the city of Detroit because it has nearly 50 unions. "Mediation in Detroit?" Klee said. "I cannot imagine how mediation is going to be anything other than a waste of resources." But Judge Frank J. Bailey, who oversaw the Chapter 9 bankruptcy of Central Falls, R.I., said mediation "has a role" in resolving municipal bankruptcy disputes. Q: What exactly does "good faith" negotiations mean? A: This question is so difficult that Rhodes recently surprised attorneys involved in Detroit's bankruptcy by giving them until mid-November to deliver official opinions on the definition of "good faith" negotiations. 
Brazil's bankruptcy law was enacted in 2005 to correct inefficiencies in the previous system, which was based on postponing debt payments rather than saving a company through renegotiation or restructuring. Creditors, who rarely saw repayment following a bankruptcy filing, would charge exorbitant interest rates in response. Inspired by the U.S. bankruptcy code's Chapter 11 procedure, creditors now play a key role in Brazil's process, which is designed to increase recovery rates, reduce credit risk, and bring down the cost of financing. Some of the largest Brazilian companies to have filed for bankruptcy protection under the new law include airlines Viacao Aerea Sao Paulo SA, known as Vasp; Viacao Aerea Rio-Grandense SA, or Varig; pulp producer Eucatex SA, and electricity holding company Grupo Rede Energia SA. While some companies, such as Eucatex, have successfully emerged from the process, others such as Vasp were liquidated. Others, such as Grupo Rede, were sold off. 
They must total all debts and assets, including a mortgage as debt and the value of property as an asset, and then assess which debts are positive and negative (i.e. college loans are positive and credit card bills are negative). Next, drivers should reduce expenses wherever possible. They must first total all monthly expenses and indicate which are necessities and which are not. Add up the minimum payments and cost of monthly necessities, which is the minimum amount needed to pay bills each month. If a person has difficulty paying bills or reducing debts he or she must find a way to reduce expenses, even if by temporarily switching from name brands to generic labels. Then, it is recommended that drivers find a way to consolidate debt. Several small debts can be difficult to manage, but consolidating them will reduce monthly bills and the amount of payments.