Bankruptcy Indiana

Looking back, I realize that my article in Bankruptcy in Indiana earlier this week was focused on the negative, or at least preparing for a negative event such as a job loss. As a debt consolidation lawyer who’s practiced Indiana bankruptcy law for decades, I wanted to emphasize the crucial role income from jobs plays in successfully emerging after filing either personal bankruptcy in Indiana or even in emerging after small business bankruptcy in Indiana.

Today’s article, by contrast is about two happy endings to corporate bankruptcy, one in Indiana, the other in Pennsylvania.

Less than one month ago, a company called Capmark Financial (a real estate finance company headquartered in Pennsylvania), was able to emerge from bankruptcy.  Notes, bonds, and approximately 100 million shares of the company’s stock were distributed to creditors to whom the company owed money, and a plan was agreed upon to make payments of both principal and interest on the notes and bonds.

Exactly as happens with personal bankruptcy in Indiana, the bankruptcy process “bought time” for Capmark to get its financial affairs organized, to work out a plan that would treat all the parties equitably, including the shareholders, the creditors, the employees, and the executives.  In precisely the way all my colleagues in the Zuckerberg bankruptcy law offices see every day in our work, bankruptcy serves as a “cooling off” period, so that a plan can be worked out without pressure from creditors.

The second story is one the Anderson bankruptcy lawyers and I have been following for the past year and a half. In March, 2010, the Chapter 11 bankruptcy of Hoosier Park in Anderson was the featured story in Bankruptcy in Indiana. At that time, the company (parent company Centaur, LLC) and its lenders agreed to work together to keep the business going, allowing the company to pay its debts over time.

By way of reminder to readers, Chapter 11 bankruptcy in the corporate world is parallel to filing personal bankruptcy in Indiana under Chapter 13 bankruptcy law, in that both involve a debt repayment plan over time.

Now, I am happy to report, the Anderson ”racino” has successfully emerged from bankruptcy. The gambling house and racing permits have been transferred to the newly emerged company.  Centaur has sold off its holdings in Colorado and Pennsylvania under the agreement, and now owns only Indiana-based properties (the Anderson park, plus offsite betting places in Indianapolis, Fort Wayne, and Merrillville).  Whatever your views about horse tracks or gambling, it’s a positive sign whenever a company can continue to operate and generate income to employees and help the local economy. And anything that helps the local economy means jobs with income, and that makes Mark Zuckerberg very happy. 

Every lawyer for bankruptcy in Indiana knows: with Indiana being home to more than 500,000 small businesses, every company that emerges from bankruptcy will have a positive “ripple effect” on other people and other businesses. As on of the Columbus bankruptcy lawyers who is my colleague there pointed out, there will be that many fewer people needing payday loan debt help, that many fewer needing help to stop foreclosure on their homes.  All good bankruptcy attorneys in Indiana like being able to report some positive “ripples”!