Misery Index: Weeks of November 20 and 27, 2017

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

Mortgage Finance Company Lands in Bankruptcy Court With Billions in Debt Walter Investment Management Corp. sought protection from up to $10 billion in liabilities in the Southern District of New York. The chapter 11 petition was signed by Senior VP David Coles, who cited contracted liquidity. According to news reports, affiliates Ditech Financial and Reverse Mortgage Solutions are expected to continue operations in the ordinary course without filing bankruptcy pleadings. Along with its pleading, the debtor filed a prepackaged chapter 11 plan of reorganization. In 2016, the debtor was sued over unfair and deceptive business practices.

Read Clayborn v Walter Investment Management Corp., Ditech here.
Read the declaration of Mr. Coles here.

Labor Disputes Land Japanese Restaurant Operator in Bankruptcy Ra mla USA Inc. sought protection from up to $50 million in liabilities in the Central District of California. The chapter 11 petition was signed by CEO Yuji Ueno, who cited “mounting legal costs resulting in liquidity concerns and a diversion of human capital resources” related to employee lawsuits.

Read the declaration of Mr. Ueno here.

Cycling Retailer Spins Debt in Bankruptcy Court Niner Inc. sought protection from up to $10 million in liabilities in the District of Colorado. President Chris Sugai signed off on the chapter 11 petition. According to news reports, the debtor lacked resources to invest in R&D and marketing.

Outpatient Care Center Bankruptcy Follows Allegations of Medicare Overbilling Advanced Vascular Resource of Johnstown LLC sought protection from up to $10 million in liabilities in the Western District of Pennsylvania. The chapter 11 petition was signed by President Mubashar A. Choudry, whose medical license was suspended by the D.C. Board of Medicine in 2015. Mr. Choudry also settled an investigation involving allegations of Medicare overbilling in 2014, according to the Department of Justice.

Lender Forces Property Formerly Owned by Irish Developer Into Bankruptcy An involuntary petition was filed against 74 Grand St. Equities LLC in the Southern District of New York. The chapter 11 pleading was signed by creditors Equity Environmental Engineering, Damo Construction Company Inc. and lender Churchill Credit Holding, who claimed the debtor owes $13,708,003.52. According to court records and news reports, the property was originally owned by Gayle Dunne, who is legally separated from Irish developer Sean Dunne.

Read the statement of petitioning creditors here.

Sneaker Retailer Bankruptcy Blamed on Failure to Expand Into the Midwest Shiekh Shoes sought protection from up to $100 million in liabilities in the Central District of California. The chapter 11 petition was signed by CEO Shiekh Ellahi, who cited a failure to enter the Midwest marketplace as well as the rise of e-commerce.

Read the declaration of Mr.Ellahi here.

 Urban Radio Station Operator Lands in Bankruptcy Court Cumulus Media and 36 affiliates, including WPLJ Radio LLC, sought protection from up to $10 billion in liabilities in the Southern District of New York. The chapter 11 petition was signed by Senior Vice President Richard Denning. “The debt overhang left by previous years of underperformance remains a significant financial challenge that we must overcome for our operational turnaround to proceed,” said CEO Mary Berner in a statement posted online. WPLJ Radio first filed in 2009, citing soil contamination at radio station sites.

Texas Broker Dealer Embroiled in Accusations of Misappropriation Fails Formerly known as Chestnut Exploration Partners, Texas E&P Partners sought protection from up to $50 million in liabilities in the Northern District of Texas. The chapter 11 petition was signed by President Mark A. Plummer, who stands accused of obstructing an investigation by furnishing false documentation and misappropriating customers’ funds, according to the website of the FINRA.

Housing Project Bankruptcy Blamed on Relationship Woes Pine State Housing, Series LLC sought protection from up to $50 million in liabilities in the District of Maine Portland Division. The chapter 11 petition was signed by Manager Kevin J. McCarthy, who cited a deteriorating relationship with the property manager.

Read the declaration of Mr. McCarthy here.

Sporting Goods Distributor Bankruptcy Discloses Asian Creditors Maurice Sporting Goods and four affiliates sought protection from up to $500 million in liabilities in the District of Delaware. The chapter 11 petition was signed by Chief Restructuring Officer Patrick J. O’Malley, who cited defaulted prepetition liabilities and liquidity issues. Creditors include HKM International Ltd. And Yuan Huang.

Read Mr. O’Malley’s declaration here.

After class action suit, Radiology Services Provider files for bankruptcy DBA Advanced Medical Imaging Center, Metropolitan Diagnostic Imaging Inc. sought protection from up to $10 million in liabilities in the Northern District of Illinois. The chapter 11 petition was signed by President Moqueet Syed who was named in a class action suit over violations of the Fair Labor Standards Act..

Read about the class action lawsuit here.

Maryland Property Leasing Manager Follows Affiliates into Bankruptcy TSC/Green Acres Road LLC followed three affiliates in seeking protection from up to $10 million in liabilities in the District of Maryland. The chapter 11 petition was signed by Trustee Gerard McDonough. S. Bruce Jaffe, the manager of bankrupt affiliates College Park Investments, LLC, TSC/JMJ Snowden River South, and Stein Properties, was suspended indefinitely from practicing law by the Attorney Grievance Commission of Maryland last year.

Texas Strip Club Debt Includes Failure to Pay $1.1 Million Fee to the State Doing business as Stilettos Gentlemens Club and Stilettos Cabaret, Red Tape Inc. and Red Tape II Inc sought protection from up to $10 million in liabilities, of which $1,123,248.41 is owed to the Texas Comptroller of Public Accounts for operating a sexually oriented business. Filed in the Southern District of Texas, the chapter 11 petition was signed by President Ramiro Armendariz, who is under police investigation for alleged illegal gambling that took place in September 2017, according to news reports.

Mobile Content Provider Files For Bankruptcy Again Tarsin Mobile Inc. sought protection from up to $10 million in liabilities, of which $600,000 is owed to the Lender Agile Opportunity Fund. Filed in the San Fernando Valley District of California, the chapter 11 petition was signed by Secretary Michael Ghiselli. The debtor filed its first bankruptcy pleading in 2013 along with affiliate Game2 Mobile due to multiple claims of ownership, which threatened to foreclose on the asset, according to court records.

Read the affidavit of Mr. Ghiselli here.

Fruit and Vegetable Farmer Files For Bankruptcy Following Lawsuit Spiech Farms LLC sought protection from up to $10 million in liabilities, of which a disputed $453,591.50 is owed to Produce Pay. Filed in the Western District of Michigan, the chapter 11 petition was signed by member Timothy M. Spiech. The debtor sued Produce Pay over a security interest that is alleged to be unauthorized related to a $1,100,000.00 loan for a fall grape harvest.

Read the complaint of Speich Farms v Produce Pay Inc. here.

Millennial Debt Repayment Website Lands in Bankruptcy Court SaveUp Inc. sought protection from up to $10 million in liabilities in the Northern District of Illinois. The chapter 7 petition was signed by Paul Burt, a serial entrepreneur who acquired the personal finance startup after its founder Priya Haji died unexpectedly from a  pulmonary embolism at 44 years old, according to news reports.

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