Misery Index: Weeks of August 28 and September 4, 2017

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PacerMonitor’s look back at this week's most compelling bankruptcies

Bankruptcy of Imitation Sunglass Company Follows Patent Dispute

After being sued for patent infringement by designer eyewear company Oakley, Milner Distribution Alliance sought protection from up to $10 million in liabilities in the District of Colorado. Doing business as Maxx Sunglasses, which are sold at Walmart, the company first filed for bankruptcy in 2013. The most recent chapter 11 petition was filed by President Richard Milner.

 Read Oakley’s complaint here.

 Boston Hedge Fund Forced Into Bankruptcy Following Fraud Accusations.

Three petitioners signed a chapter 11 involuntary pleading to force the RMA Strategic Opportunity Fund into bankruptcy in Massachusetts Bankruptcy Court. Investors include Anna Collete Young, Amy J. Young and Craig F. Spencer, who allege they were defrauded out of a combined $1.160,598.48. Manager Raymond Montoya misused millions for luxury vehicles, a mortgage and to repay earlier investors in a Ponzi-like scheme, according to media reports.

Celebrity Shoe Designer Leaps Over Debt in Bankruptcy

Yosi Samra sought protection from up to $10 million in liabilities, including $1.9 million owed to Rong Xing Shoe Factory. The chapter 11 petition was signed by President Larry Reines. According to court records, celebrities such as Halle Berry, Anne Hathaway and Sarah Jessica Parker were spotted wearing the foldable ballet flat. In his declaration to the Southern District of New York, CEO Samra blamed a decline in sales, fixed overhead expenses and lost distributors due to the shoe being manufactured at a factory that made low-quality goods.

Read Mr. Samra’s declaration here.

Court Receivership Fails to Save Ann Arbor Mixed Use Building

Packard Square LLC sought refuge from up to $50 million in debt in the Eastern District of Michigan. The chapter 11 petition was signed by Developer Craig Schubiner. According to documents, McKinley Inc. is currently serving as receiver on the Packard Street property, which was to house 249 residential units with luxury amenities, some 30,000 square feet of retailers and more than 450 parking spaces, but Schubiner alleges the court assigned receiver mismanaged the property since appointed in November.

 Read Mr. Schubiner’s affidavit here

Celebrity Perfume Bankruptcy Discloses Jay Z Holding

Perfumania Holdings Inc. and 18 affiliates sought refuge from up to $500 million in assets and liabilities. In court records, President Michael W. Katz blamed increasing consumer emphasis on internet-based retail, declining mall traffic, decreasing sales, changing trends and expensive leases for straining the business and necessitating bankruptcy. The chapter 11 petition disclosed that Shawn Carter, also known as rapper Jay Z, and Parlux Fragrances are among equity security holders. Parlux Fragrances sued Mr. Carter in January 2016 over an unfulfilled agreement to promote the cologne Gold Jay Z.

 Read the affidavit of Mr. Katz here

 Texas Ranch & Resort Parks Its Debt in Bankruptcy

Located at 566 Flying L Drive in Bandera, Texas, Trey West Vacations LLC sought protection from up to $10 million in debt, of which $2,154,887.40 is owned to loan agency LiftFund. The chapter 11 petition, signed by President Robert J. Jenkins Jr., was filed in the Western District of Texas and involves the Flying L. Ranch, a Texas Hill Country Resort  & Conference Center, which was once thought to be designed by Frank Lloyd Wright, according to news reports.

 Fruit Processor Seeks Sweet Debt Deal in Bankruptcy

Cherry Growers Inc. sought protection from creditors in the Western District of Michigan. President Eric MacLeod signed the chapter 11 petition, citing up to $50 million in liabilities, of which $578,206.61 is owed to Grower Cherry Home Orchards LLC. In 2015, Heeren Bros. sued Cherry Growers Inc for allegedly violating the Perishable Agricultural Commodities Act.(PACA) by failing to pay Heeren promptly.

Read Heeren’s complaint against Cherry Growers here

 Race Car Driver’s Rental Car Company Breaks Down

Touted as an affordable way to get around abroad, Europe by Car sought protection from up to $10 million in liabilities while it seeks a buyer. Filed in the Southern District of New York, the chapter 11 pleading was signed by President Alex Roy, an American rally race driver whose father Henry founded the company in 1954. Some $1.6 million is owed to Henry Roy Living Trust. According to the younger Mr. Roy, the company has become unable to pay its debts.

Read Mr. Roy’s declaration here

 Judge Forces Failed Festival to Dance With Creditors in Bankruptcy Court

Justice Martin Glenn signed an order on Aug. 29 requiring the Fyre Festival LLC to respond to an involuntary bankruptcy petition filed in the Southern District of New York. The 2017 music festival was founded by Billy McFarland and Jeffrey Atkins, whose stage name is Ja Rule. The chapter 7 petitioners, blues musician John Nemeth, Raul Jimenez and Andrew Newman, sank a combined $530,000 into the venture. The forced bankruptcy follows a May federal complaint filed in the Eastern District of Pennsylvania against festival founders by National Event Services for false marketing and advertising.

 Read the federal complaint filed against Mr. McFarland and Mr. Atkins here

 Lehman Brother’s Affiliates Unwind in Bankruptcy

Lehman Brothers U.K. Holdings (Delaware) Inc. and Lehman Pass-Through Securities sought protection from up to $500 million and $100 million in debts, respectively. Both chapter 11 petitions were filed in the Southern District of New York and signed by Assistant Treasurer Christopher Mosher.

After $2.5 Million Complaint, Real Estate Company Lands in Bankruptcy

Maximus III Properties sought protection from creditors in the Northern District of Ohio, disclosing up to $500,000 in liabilities and $10 million in assets. The chapter 11 petition was signed by Managing Member Sergio DiPaolo, who was arrested for falsification and telecommunications harassment, according to media reports. In July, Maximus III Properties sued Autoparkit for $2.5 million in damages over breach of obligation allegations related to a lease agreement.

Read the complaint against Autoparkit here

Alaska Newspaper Bankruptcy Freezes Debt After Eviction Lawsuit

Alaska Dispatch News (ADN) sought protection from up to $10 million in liabilities. The chapter 11 petition was signed by Publisher Alice Rogoff, who claims she obtained a $13 million personal loan from Northrim Bank to purchase Anchorage Daily News stock. GCI filed suit against ADN, AK Publishing and Ms. Rogoff on Aug. 11, claiming more than $1 million in damages for nonpayment of rent and unpaid utility bills, according to court documents and media reports.

Read Ms. Rogoff’s declaration here

Utah Care Center Joins California Affiliate in Bankruptcy

Avalon Care Center – Chandler LLC seeks protection from up to $10 million in liabilities in the District of Utah. Signed by Anne Stuart, the pleading disclosed a mere $50,000 in assets. The debtor is a wholly owned subsidiary of a chain that includes Avalon Health Care Inc., which was sued by Helen Schirmer whose complaint cited medical malpractice and personal injury causes of action. Affiliate Avalon Care Center – Chowchilla also filed a bankruptcy pleading in June in the Eastern District of California.

Read Schirmer v Avalon Health Care Inc here

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