Indy Promoter Bankruptcy Hurts Local Businesses

Bankruptcy not a topic in early talks with state, says Detroit emergency manager Kevyn Orr

The receiver handling the bankruptcy recently told the companythat it will only get $8,000. We didnt know this was coming, said general manager Tim Hawirko. Totally blindsided by it. Hawirkos company provided services for the 2011 Indy, whichwas run by Octane, as well as earlier versions of the http://www.socallawsupport.com/ race that were handled byNorthlands. Hawirko said the shortfall has hurt the business. Our employees for the past year never got a raise, he said. Some of our management staff actually took a rollback in wages just for us to survive this. Octane owes more than $5 million to dozens of businesses around Edmonton, including restaurants, hotels and fuel companies.
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Bankruptcy trustee for 'The Village at Knapp's Crossing' claims 'gross mismanagement'

They've been asking the judge to look into who else [the Republican governor] considered for the emergency manager position before settling on Orr, who represented Chrysler in its 2009 bankruptcy, to prove that Snyder just wanted someone who knew a lot about bankruptcy. What is an emergency manager? Michigan has had emergency managers for a while now, but they were given more power by a law, Public Act 4, passed by the Michigan Legislature in March of 2011, shortly after Gov. Snyder took office. Public Act 4 allowed the state's governor to appoint an emergency manager to take over from elected officials in any municipality or school district in Michigan undergoing a "financial emergency." Voters repealed Public Act 4 last November, but the Legislature passed another emergency manager law, Public Act 436, in December.
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NAPWA bankruptcy case reopened for trademark sale

A second legal action against the bankrupt company was also filed that aimed for earned unpaid wages under California labor laws, including for 30 days beyond a fired employee's termination. Last month, a joint motion was filed in bankruptcy court that sought approval for a $1 million settlement for wages and benefits left outstanding. According to the terms of the settlement, after $10,000 payments are made to the two class representatives, the $980,000 balance, minus one-third attorney fees and other court costs, will be divided among the fired workers who choose not to opt out. It'll happen on a pro rata basis based on compensation records kept by Rhythm & Hues. A class notice will likely be issued soon. After a hearing last week, a judge gave preliminary approval and set a hearing for final approval on Dec. 13.
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Digging into Detroit's bankruptcy filing

The shutdown took place after its longtime president and CEO Frank Oldham left the organization under a cloud three months earlier. The bankruptcy filing says Oldham owed NAPWA $88,360 in an unexplained accounts receivable claim. Oldham and the NAPWA board members that initiated the bankruptcy have declined to comment on why Oldham owed the organization money. They also have declined to say whether the money Oldham reportedly owes was related to a decision by the board to ask the Montgomery County, Md., States Attorneys office to investigate missing or unaccounted for funds from the groups bank accounts. Health HIV came under fire from some AIDS activists in May when news surfaced that it appointed Oldham and four other former NAPWA officials to a steering committee for a Health HIV project called Positively Healthy. At the time he joined the project Oldham said the new venture would pick up where NAPWA left off to become a key advocate for people with AIDS.
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Detroit emergency manager testifies that he never promised to file for bankruptcy if hired

After taking the job, he saw firsthand the high crime, blight and deplorable conditions of police equipment and facilities, he said Friday. "Basically everything that I had read was substantiated in very stark relief," Orr said. Orr, a bankruptcy expert who represented automaker Chrysler LLC during its successful restructuring, has said the city is saddled with $18 billion in long-term debt. He and Police Chief James Craig both testified on the trial's third day about the city's dire straits. Orr will return to the trial on Monday, where he's expected to be grilled by attorneys representing groups who oppose bankruptcy.
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Bankruptcy Hearings Begin In Detroit

Chapter 11 bankruptcy allows debtors to reorganize their obligations to creditors and stay in business while operating under the authority of a court-appointed bankruptcy trustee like McDermott. A Chapter 7 case sells off the assets and distributes the proceeds to creditors who are owed money. Benner filed for Chapter 11 protection after his anchor tenant, P.F. Changs, claimed it was owed $147,000 in rent credits because he failed to have the restaurant built and ready to open in 2011. In his court filings, Benner listed a total of $7.4 million of debts to several banks, lawyers, the city of Grand Rapids and Kent County. The lack of monthly reports constitutes gross mismanagement of the estate, McDermott stated in his petition filed Thursday, Oct. 24. The debtor has neither sought an extension of these filing dates beyond Oct. 4, 2013, nor does the motion for an extension that was filed by the debtor offer any explanation or justification for a further delay in filing these reports, McDermott wrote in his request.
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Orr subsequently met several times with Michigan officials in February, and a Chapter 9 filing was not discussed in those meetings, Orr said in response to questions. Gov. Snyder named Orr to the emergency manager job on March 25. Orr said he at first resisted the appointment because he anticipated the strain on his family, including two young children. In a lighter moment under questioning from Gregory Shumaker, a former Jones Day colleague, Orr said he was surprised his wife allowed him to take the demanding emergency manager job and move from the Washington, D.C., area to his post in Detroit. "I thought she would shut it down fairly quickly," Orr said. When Orr returns to the stand on Monday, he likely will be asked to explain his efforts to negotiate with the city's numerous creditors, including retirees and pension funds, before the city filed for the largest-ever Chapter 9 municipal bankruptcy on July 18. The questions to Orr Friday afternoon were confined largely to a review of his career before being appointed by Snyder to be emergency manager in late March.
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Rhythm & Hues Bankruptcy: $1 Million Settlement for Fired Workers

Detroit went to court this week. What used to be the fifth largest city in the United States, and is now the 18th, filed for bankruptcy in July. But just this last Wednesday, hearings began to determine whether the city negotiated in good faith on paying pensions and whether it can legally file for bankruptcy. So, what is the mood in what's still the Motor City as it approaches an important night on the local calendar? We're joined now by Rochelle Riley of the Detroit Free Press and joins us from member station WDET in Detroit. Thanks so much for being with us.
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