Misery Index: Week of March 13, 2017



Sets on Solar Energy Company Sungevity

Sungevity Inc. and three affiliates filed for bankruptcy Monday in Delaware. The decision to file chapter 11 was declared unanimous by Sungevity’s board in court filings. The Oakland, Calif.-based company seeks to operate as a debtor-in-possession with assets and liabilities of up to $500 million and some 10,000 to 25,000 creditors.

Investors led by Northern Pacific and Hercules Capital could potentially acquire all of the assets of Sungevity if the court approves their asset purchase agreement. Leading up to the bankruptcy, Sungevity had cut 410 jobs in 2017 alone.

Read the Affidavit.

Gordmans Joins Growing List of Bankrupt Retailers

Claiming $131 million in debt, up to 500 million in assets and liabilities and 25,000 creditors, Gordmans Stores filed chapter 11 Monday with plans to liquidate.

Founded in 1915, the discount department store chain operates more than 100 locations in 22 states and employs about 5,100 people. In the U.S. Bankruptcy Court for the District of Nebraska, President and CEO Andrew Hall signed off on the filing stating that Great American Group and Tiger Capital Group will sell inventory and merchandise from Gordmans’s and its subsidiary retail store locations through store closing, sale on everything, going out of business and everything must go proceedings. Along with Gordmans’s LLC, a total of five affiliates filed bankruptcy petitions.

Bostwick Laboratories Buckles Under Past Legal Settlement

Bostwick Laboratories Inc. and its parent company filed chapter 11 in the U.S. Bankruptcy Court for the District of Delaware Tuesday, listing up to $10 million in assets and $40.9 million in debt. Some 999 creditors include the U.S. Department of Justice (DOJ). According to Bostwick CFO Tammy Hunt’s declaration, the medical testing services company owed the DOJ $7 million, of which $2.7 million is still outstanding. The debt is a result of a legal settlement involving alleged violations of the False Claims Act for making payments to physicians in exchange for using Bostwick’s laboratory testing services which may not have been medically necessary. Ms. Hunt also stated that revenue dropped 20% as a result of unexpected and severe cuts to the Medicare physician reimbursement fee schedule in 2013. Poplar Healthcare PLLC is the pre-arranged DIP Lender and stalking horse bidder for Bostwick Laboratories.

Read the Declaration.

BCH Capital, Run by Embattled Mortgage Broker, Succumbs to Bankruptcy

BCH Capital claimed bankruptcy Wednesday to stay a Uniform Commercial Code (UCC) sale of its affiliate Cypress Way, which filed the same day in U.S. Bankruptcy Court for the Southern District of New York. Chapter 11 filings for BCH Capital that were signed by its managing member Theodore Welz cite estimated assets and liabilities up to $10 million and 49 creditors, including GC Realty Advisors, which manages the Cypress Way multifamily apartment complex in Islip Terrace, N.Y. Mr. Welz gained attention when he was sued by the New York State Attorney General along with other real estate professionals for allegedly engaging in a fraudulent real estate flipping scheme that targeted minority neighborhoods in Brooklyn, according to AG Eric T. Schneiderman’s website. CG Realty Advisors’ affirmation in the chapter 11 filing of Cypress Way claims that the multifamily property defaulted on its note and mortgage due to construction delays that prevented it from renting out all units according to schedule. Other affiliated bankruptcies include Romad Realty and West 41 Property LLC.

Bell Tolls for College Student Landlord Cortland Habitats

College student landlord Cortland Habitats CEO Jeff D. Grodinsky signed off on the company’s chapter 11 filings on March 15 that listed assets and liabilities up to $10 million. The company joined affiliates Campus Habitats, LLC, College Hill Realty and Committed to Cortland, LLC in their related chapter 11 filings in the U.S. Bankruptcy Court for the Eastern District of New York. Cortland Habitats’ trouble started at least a few months back. On a Facebook page called SUNY Cortland Parents and Families, there are multiple complaints by parents and students attending the State University of New York at Cortland warning others not to rent from Cortland Habitats. “They sent us our security check back and it bounced,” Margaret Schuchmann-Keogh wrote in a Jan. 16, 2016 post on Facebook. “How do we get them removed from the SUNY Cortland list if they cannot live up to expectations? In my son’s house alone we are out $2,000 plus bank fees for the bounced checks.”

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