Misery Index: Week of September 18, 2017

Competitive Retail Environment Blamed for Toy Store Bankruptcy Toys “R” Us Inc. and 24 affiliates, including Wayne Real Estate Parent Co. sought a safe haven in the Eastern District of Virginia. The debtor claimed up to $10 billion in liabilities in its chapter 11 petition signed by N. Cornell Boggs III. Some $208,340,000 is owed to Bank of New York. According to court records, the over leveraged capital structure and attendant interest expense has prevented the retailer from making  investments necessary in the current competitive retail environment.
Upscale Hair Salon in Manhattan Undergoes Second Bankruptcy  Filed in the Southern District of Florida, La Contessa Inc. sought protection from up to $10 million in liabilities. The debtor had originally filed for bankruptcy in February 2015 disclosing that $1,997,910.13 was owed to Sidney Abusch, a CPA in New Orleans.
Both chapter 11 petitions are signed by Thomas M. Priano, who claims the beauty shop’s financial failure is due to irresponsible and opportunistic professionals. Mr. Priano filed a personal pleading in August blaming Mr. Abusch and his wife Darla Leonard for more than $700,000 in payroll tax liabilities assessed against him by the IRS.
Read Mr. Priano’s declaration here
Aluminum Producer Enters Bankruptcy After Court Judgment  In the District of Nevada, Production Pattern & Foundry Co. Inc. applied for protection from up to $50 million in liabilities, of which a $917,203.13 legal judgment is owed to Cass. President Arlene Cochran signed the chapter 11 petition, which also disclosed  $1,483,708.93 owed to Custom Alloy Light Metals.
Read the breach of contract lawsuit that Cass launched here
Check Cashing Chain Bankruptcy Follows Multiple Legal Entanglements After a lawsuit alleged its business model was illegal, Cash Zone, doing business as Cash Biz LP and Redwood Financial sought protection in the Eastern District of Texas. Dave Flanagan signed both chapter 11 petitions, claiming up to $500,000 in liabilities. Among the lawsuits filed against Cash Zone was a class action complaint and another that alleges unlawful debt collection practices.
Read Johnson v Cash Zone here
Asian Private Jet Operator Faces Financial Collapse After Fraud Allegations Zetta Jet USA Inc. sought protection from up to $100 million in liabilities in the Central District of California – Los Angeles Division. The chapter 11 petition was signed by CEO and President Michael A. Maher. Some $15,135,000.00 in contract liquidated damages is owed to Bombardier. Parent company Zetta Jet PTE Ltd also filed for bankruptcy after being sued over alleged unlawful conduct and unfair business practices among other claims.
Read the Argus Marine Ventures v Zetta Jet USA lawsuit here
Real Estate Subdivision Bankruptcy Seeks to Parcel Off DebtPremier Investment Company II LLC sought a safe haven from up to $10 million in liabilities in the District of Kansas. Manager David Hoff signed off on the chapter 11 petition. After filing for bankruptcy in 2012, affiliate CIP Investment Properties, LLC was ordered to pay Sedgwick County some $2,883,768.00 after alleging it had violated the Equal Protection Clause of the 14th Amendment to the Unites States Constitution in relation to the appraised value of the Thorn Building in Wichita, Kansas.
Read CIP Investment Properties LLC v Sedgwick County here
Upstate New York Project Bankruptcy Follows Planning Board Lawsuit Blacksmith Square Partners LLC sought protection from up to $10 million in liabilities in the Northern District of New York. The chapter 11 petition was signed by Member Neil S. Swingruber Jr. who along with Bruce Schnitz attempted to develop a luxury apartment and retail complex in Malta, N.Y., but were denied a special use permit. According to media reports, the partners sued to contest the town planning board’s decision.
California Construction Firm Crumbles Under Debt Group One Construction plead for protection from up to $10 million in liabilities in the  Northern District of California. The chapter 11 petition was signed by President Richard Lee Foust.
False Claims Complaint Leads Florida Company to Fail Capitol Supply Inc. sought protection from creditors in the Southern District of Florida.
CEO Robert Steinman signed off on the chapter 11 petition, which claimed up to $10 million in liabilities and listed creditors such as Bank of America, the IRS, SEC Headquarters and the Office of the Florida Attorney General. The debtor was sued in the District Court for the District of Columbia because it allegedly made false claims about the sale of noncompliant products to the U.S.government.
Read the complaint against Capitol Supply here.
Texas Energy Firm Bankruptcy Follows Securities Board Inquiry Crooked Oak LLC sought protection from up to $500,000 in liabilities in the Northern District of Texas. Doing business as CO Energy and Santa Rita Holdings LLC, the chapter 11 petition was signed by President Cord D. Johnson who was named in a cease and desist letter written by the Texas State Securities Board, disclosing that the Texas Railroad Commission had cancelled the debtor’s certificates of compliance and severed all pipeline or carrier connections used by CO Energy.


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