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Toys R Us mascot finds new home

The former toy giant Toys R Us which has been liquidating its assets after declaring bankruptcy has found a new home for one item that they have been having trouble unloading, a statue of their mascot, Geoffrey the Giraffe.

The company has been holding going out of business sales at their stores but this girafee turned out to be a white elephant of sorts.

Although there was interest, the statue is 16-feet tall and weighs 550-pounds and nobody wanted to pay the necessary expense to move it. Enter Joseph Malfitano, whose firm Malfitano Partners were advisors on liquidating the company’s assets.

Malfitano embarked on a search of children’s hospitals who might be interested in giving Geoffrey a new home. While he had some nibbles from hospitals, they couldn’t take the statue due to its size.

Maltifano told BloomberNews, “I thought having this thing in a hospital would cheer kids up. The giraffe is smiling, and is raising his forelegs triumphantly as if he has just completed a gymnastic flip.”  Malfitano’s son has type 1 diabetes and gets treated at a hospital near Denver, which wanted the statue but couldn’t accommodate its large size.

In a last ditch effort, Maltifano posted on his LinkedIn page looking for someone to take the giraffe. That’s where former colleague Andrea Saavedra saw the posting and eventually connected Malfitano to a hospital who agreed to take the statue: the Bristol-Myers Squibb Children’s Hospital in New Brunswick, New Jersey.

Saavedtra told BloombergQuint.com,“As a resident of New Jersey, I felt pretty strongly that this iconic piece of retail history stay in New Jersey.” Toys R Us HQ is located in Wayne, New Jersey, 50 miles from the hospital. Maltifabo agreed to pay for the cost of transporting the 550-pound fiberglass beast.

“I just thought it would be really cool for a sick kid to see,” said  KenRosen, who is a board member at RWJBarnabas Health, the health-care network that includes the hospital. “It’s probably incredibly therapeutic if you’re a sick child looking for a little mental health boost.”

Rosen, is chair of the bankruptcy department at law firm Lowenstein Sandler, heard about the plan from Saavedra and agreed with his wife to donate the cost of Geoffrey’s installation at the hospital, which he expects to be about $6,000. His firm represented some vendors that were creditors to Toys “R” Us.

Bloomberg reports Buying Geoffrey ended up being a little more expensive than Malfitano had expected after more interest for the statue emerged at the last minute.

“There was another offer for it, so we had to pay more than the other guy,” he said.

For more info read the source article at Bloomberquint.com

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Student loans and bankruptcy

It is commonly understood that you are not able to discharge student loan debt through bankruptcy. This is true…for the most part. There are circumstances where you can use bankruptcy.

Forbes points us to Make Lemonade for some advice:

According to Make Lemonade, there are more than 44 million borrowers who collectively owe $1.5 trillion in student loan debt in the U.S. The average student in the Class of 2016 has $37,172 in student loan debt.Unlike other consumer debt such as credit card and mortgage debt, however, student loans traditionally cannot be discharged in bankruptcy.

Student loans are now the second highest consumer debt category – behind mortgages, but ahead of credit card debt.

There are exceptions, if certain financial hardship conditions are met.

The Brunner Test: Financial Hardship

Brunner test is the legal test in all circuit courts, except the 8th circuit and 1st circuit. The 8th circuit uses a totality of circumstances, which is similar to Brunner, while the 1st circuit has yet to declare a standard.

In plain English, the Brunner standard says:

  1. the borrower has extenuating circumstances creating a hardship;
  2. those circumstances are likely to continue for a term of the loan; and
  3. the borrower has made good faith attempts to repay the loan. (The borrower does not actually have to make payments, but merely attempt to make payments – such as try to find a workable payment plan.)

How Do You Discharge Student Loans In Bankruptcy?

An adversary proceeding needs to be filed in a bankruptcy court. The debtor has to prove that repaying the loan would create a financial hardship.

The Wall Street Journal, (WSJ) which spoke to more than 50 current and past bankruptcy judges appointed during both Democratic and Republican administrations, found some judges are more open to helping debtors.

Does that mean the floodgates are open and student loans can be discharged in bankruptcy?


Fortune wrote that the Wall Street Journal said some judges are looking at ways to help alleviate the strain. The Wall Street Journal wrote the instances could include:

  • encouraging bankruptcy attorneys to represent debtors at no cost
  • potentially eliminating future tax bills that be linked to student loan debt relief or debt cancellation after 25 years through federal student loan repayment programs
  • cancelling private student loan debt from unaccredited schools
  • allowing student loan borrowers to make full payments during the Chapter 13 debt repayment period (which can last five years.)

What Else Can You Do If Your Struggling To Make Student Loan Payments?

For more info please see Can Student Loans Now Be Discharged In Bankruptcy?

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The state of bankruptcy

In 2009, in the middle of the last recession, commercial bankruptcies peaked at a high of  8,277 in May of that year according to the American Bankruptcy Institute. Since that time they have leveled out.  In May, 3,300 businesses filed for bankruptcy. While that was up from April,  the number of filings have been on the decrease for the past few years.

Since May of 2009, bankruptcy filings have been falling continuously from month to month until May of 2016 when just over 3400 were filed. That number was up over 800 from May 2015. In the year since then filings have fluctuated.

Consumer filings seemed to mirror the  commercial ones but since 2014 they have been on the rise with no fluctuations. No surprise that states with the lowest median incomes have been hit the hardest.

Alabama was the hardest hit and six of  the 10 states and eight of the 10 counties with the highest rate of personal bankruptcy filings are in the South. In addition, the top states also have the least legal protections for debtors.

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Is estate planning still needed?

Last year Congress passed the Tax Cuts and Jobs Act of 2017 which pretty much killed the aptly named death tax. It didn’t actually kill it just exempted those who leave less than $11 million to their heirs.

Since the idea of no leaving a federal tax burden to their heirs, many people are questioning the need for estate planning since one of the main reasons to estate plan is to lessen the tax burden. But there is more to estate planning than tax issues.

Kiplinger.com has a very useful piece by Tracy Craig. Craig is a Fellow at the American College of Trust and Estate Counsel.  She has some useful info on estate planning beyond taxes.

To read more click on the links below:

State Estate and Inheritance Taxes Exist for Many

Probate Can be Costly

Many Beneficiaries Have Issues

Blended Families are Common and Can Be Complicated


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PG&E threatens bankruptcy

Reports are saying that California’s largest utility company, Pacific Gas & Electric has threatened to file bankruptcy if they are held legally responsible for the wildfires that devastated California’s wine country last year.

CBS affiliate Action News 2 reported that an unnamed California legislator told the station that since PG&E were blamed for the fires last month, the company has been worried that should they be held liable and have to pay damages it could force them to seek bankruptcy protection unless legislators bail them out.

Some lawmakers say the threat is just a scare tactic although the company did file for bankruptcy protection in 2001. Back then there were electricity shortages and blackouts due to market manipulations, and capped retail electricity prices.  The California Department of Forestry and Fire Protection said last month that 12 of last years fires were caused by malfunctioning PG&E equipment and criminal charges are being pursued.

PG&E supplies power to most of the northern two-thirds of California from Bakersfield to the Oregon border which is 5.2. million households. They are one of the biggest power company in the country.

In a statement, the company said, “We continue to believe our overall programs met our state’s high standards.”


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