Tag Archives: Chapter 11 Bankruptcy

What We Know About Lordstown EV Car Maker’s Chapter 11 Bankruptcy

By Ryan C. Wood

Howdy my fellow humans.  It seems we may have lost an option for purchasing an electric vehicle in our “free” market.  Actually, Lordstown was trying to develop an all electric commercial fleet type truck named Endurance.  Lordstown Motors Corp. aka DiamondPeak Holdings, Inc. and Lordstown EV Corporation filed for bankruptcy protection under Chapter 11 of the Bankruptcy Code in the District of Delaware,  today, June 27, 2023; Case Numbers 23-10831 and jointly administered 23-10832.  The pickup truck to be named Endurance is apparently not happening. 

The various filing by Lordstown bankruptcy attorneys provide: “The Debtors have filed these Chapter 11 Cases for the purpose of maximizing value for the benefit of their stakeholders given the ongoing, repeated breaches of contract and commitments by Foxconn.”

I do not know.  I have to question Chapter 11 filings that seek to sell all assets of the debtor rather than simply filing a Chapter 7 Liquidation case and allowing a Chapter 7 Trustee to administer the case and liquidate the estate……. Things that make you go hmmmmmmm.  So I will let you know what is up from down regarding this issue. 

Lordstown bankruptcy lawyers also immediately filed an adversary lawsuit against defendants Hon Hai Precision Industry Co., Ltd (a/k/a Hon Hai Technology Group), Foxconn EV Technology, Inc., Foxconn Ventures Pte. Ltd., Foxconn (Far East) Limited, and Foxconn EV System LLC.

Yes, the same Foxconn you have probably heard about regarding Apple, Inc. and other Silicon Valley technology industry leaders.  Their mothership name is Hon Hai Precision Industry, or more commonly referred to as Foxconn.  Foxconn is a business partner of Apple, Inc., or at least they used to be.  Anyway, the point is Lordstown is suing a big dog in the technology worldwide industry making very serious allegations.

Lordstown v. Hon Hai Precision Industry Co., Ltd. aka Foxconn

So Lordstown did not waste any time and immediately upon filing their petition for relief under Chapter 11 Lordstown also filed an adversary lawsuit against Hon Hai Precision Industry Co., LTD. aka Foxconn alleging is all their fault.

“This case arises from, and is based on, the fraudulent conduct of one of the world’s largest multinational manufacturing companies, which, over time, had the intended effect of destroying the business of an American start-up.”

“This course of conduct is nothing new for Foxconn and its affiliates—their modus operandi in the United States is to overpromise and under or never deliver.”

Ouch, that is pretty precise.  So, what specific fraudulent conduct is Lordtowns alleging against Foxconn?

  • 2018 Lordstown created to make Endurance EV pick-up truck
  • 2019 Lordstown purchased 6.2 million square feet production facility from GM Motors in Lordstown, Ohio
  • Self-Proclaimed Equity Valuation of $5.3 billion
  • Goal: Combine Foxconn’s resources and efficiencies with the Debtors’ innovation, technology, manufacturing plant and people to jointly develop the next generation of electric vehicles
  • Lordstown alleges changing its business model to compliment Foxconn’s “EV Ecosysten”
  • 9/30/2021 Lordstown entered into an asset purchase agreement with Foxconn to sell Foxconn the 6.2 million square foot production facility
  • Lordstown apparently needed the cash/capital and to lowering operational costs
  • Lordstown also entered into a manufacturing partnership with Foxconn
  • 9/30/2021 Foxconn Chairman Young Liu said “[t]his mutually beneficial relationship is an important milestone for Foxconn’s EV business and our transformation strategy. I believe that the innovative design of the Endurance pickup truck, with its unique hub motors, delivers an advantageous user experience and has manufacturing efficiencies. It will undoubtedly thrive under our partnership and business model.” Foxconn later expressed hope that it could create “a trillion-dollar business opportunity for electric vehicles.”
  • October 2021 Foxconn via an affiliate purchases $50 million worth of Lordstown shares
  • November 10, 2021, Lordstown sold the 6.2 million factory to Foxconn; but DID NOT formalize all of the other alleged agreements with Foxconn Lordstown is alleging were also part of the consideration for the reduced price of the Lordstown, OH factory
  • Blah Blah Blah Foxconn breached the investment agreement with Lordstown and this negatively affected the share price of Lordstown…….
  • On June 27, 2023, arguably faced with the reality that there were no circumstances under which Foxconn would meet its contractual obligation to Lordstown, the Lordstown voluntary filed petitions for relief under chapter 11 of the Bankruptcy Code …..

Long Story Short

The short story is Lordstown would never had sold the 6.2 million square feet manufacturing center factory, its most valuable asset, to Foxconn for 1/5 of the replacement value to Foxconn if Foxconn had not made additional promises of support and partnering with Lordstown to make the Endurance pick-up a manufacturing reality.  Lordstown alleges that once Foxconn owned the 6.2 million manufacturing center in Lordstown, OH, Foxconn stopped doing the other parts of the consideration for the sale of the factory to Foxconn.  Such as making further investments and more or less funding one way or another all Lordstown sought to accomplish.

So yeah, once upon a time I sold a truck to a dude and part of the sale was for this dude to buff the lenses on my other vehicles and detail the other vehicles.  We signed the CA DMV bill of sale and then the dude ignored me.  Funny how that works.

Lordstrom Filed A Motion to Sell All Assets Free and Clear of Liens

In layman’s terms, Lordstown, is asking the bankruptcy court for authorization to sell with an overbid process all remaining assets of Lordstown for the benefit of its “creditors.”  Yeah, we shall see if any creditor actually benefits from this Chapter 11 bankruptcy filing.  The idea is the get as much money as possible for the remaining assets of Lordstown without hammering out which creditors are entitled to the proceeds.  That will come later in the Chapter 11 LIQUIDATING plan?  Not a reorganization in which the corporate debtor lives on to fight another day.  So no Endurance truck ever will be made? I digress.

The bidding a sale process will culminate in a Sale Hearing proposed to held on September 12, 2023.

The Chapter 11 petition provides assets of between $100 million and $500 million with liabilities ranging from $100 million to $500 million as well.

As of December 22, 2022, Lordstown was estimated to have $452,312,000 in assets with $70,280,000 in liabilities.  Lordstown has shares of preferred stock totaling 300,000 and common stock shares outstanding totaling 15,944,5582.

The top 5 largest creditors of Lordstown are as follows:

Teijin Automotive Technologies, Inc. $2,083,980.20

ZF Passive Safety Systems, Inc. $1,981,531.56

Marelli North America, Inc. $1,614,252.02

Greatech Integration (M) SDN, BHd, HA LAI $1,532,600

Barry L. Leonard and Company, Inc. $1,361,252.80

50 Cent’s Bankruptcy By The Numbers As Of January 2016


There has been a lot of mass media attention regarding 50 Cent’s personal Chapter 11 bankruptcy case. First though, a company that 50 Cent owns, SMS Promotions, LLC, also filed for bankruptcy protection under Chapter 11. The mass media is for some reason incapable of understanding that when a corporation or LLC files for bankruptcy protection the individual owners have not filed for bankruptcy. Corporations and limited liability companies are separate legal entities from the owners. That is the whole point in forming the corporation or limited liability company. Unlike Donald Trump, 50 Cent in fact has filed a personal bankruptcy case under Chapter 11, Bankruptcy Case No. 15-21233, in the District of Connecticut, Hartford Division. Donald Trump has NEVER filed for personal bankruptcy protection. Second, as of January 29, 2016, the bank account set up for the bankruptcy case, the debtor-in-possession account, has $7,449,764.30 in cash. So if 50 Cent chooses to pose for a picture with around $50,000 in cash spelling the word broke that would be analogous to me or one of my clients posing for a picture of one dollar bills spelling the work broke. I will say it is a bad look, period.

The following is an analysis of 50 Cent’s disclosed income, expenses, assets and debts based upon court documents filed by 50 Cent’s bankruptcy lawyers and creditors in the bankruptcy case.


In a Chapter 11 bankruptcy reorganization a debtor must commit their monthly disposable income for the benefit of those who are owed money for a term of a minimum of five years. 50 Cent’s current monthly income and future monthly income and expenses are very important then. In Chapter 11 cases the bankruptcy filer is required to file with the bankruptcy court monthly operating reports. The reports provide the income, expenses and assets of the debtor while the bankruptcy case is progressing. These reports help creditors and the United States Trustee determine if reorganization is possible and whether the bankruptcy filer is takings steps to “right the ship” by decreasing or eliminating unnecessary expenses.

50 Cent’s January 2016 operating report provides monthly income from wages of ($1,538.68), royalties ($26,531.06) and other miscellaneous income called other receipts of ($77,000) for a total monthly income of $105,069.74. 50 Cent’s expenses for the month of January 2016 exceeded his income by about $13,000. So arguably 50 Cent does not have any monthly disposable income to pay each month for the benefit of creditors in a Chapter 11 plan of reorganization. That is if Jan. 2016 is representative of 50 Cent’s future income and expenses. 50 Cent’s creditors believe 50 Cent’s income is more and his expenses should be reduced.

On the expense side there are some high numbers as compared to the rest of us who are not on TV or in the movies. 50 Cent lists the following expenses for the month of January 2016:

Mortgage Payments $17,354.44
Real Estate Taxes $8,419.11
Utilities $12,879.73
Insurance $33,215.49
Auto Expense $3,507.59
Lease Payments $5,744.75
Repairs and Maintenance $6,593.70
Fitness Expense $3,000.00
Security $11,369.00

TOTAL EXPENSES: $118,255.81
TOTAL INCOME: $105,069.74

For the month of January 2016 if 50 Cent had not transferred $77,000 in cash from his bank accounts he would not have been able to pay his monthly expenses with his monthly income. So arguably there are some issues with 50 Cent’s ability to reorganize his debts based upon his monthly income. 50 Cent’s creditors argue that 50 Cent is underreporting his income given he has not disclosed income from recent appearances and performances since filing for bankruptcy protection. We shall see.

50 Cent’s ASSETS

In a sophisticated Chapter 11 reorganization like 50 Cent’s there are assets that are extremely difficult to value. How much is a business entity worth? What someone will pay you for it? Or is the book value the proper valuation? 50 Cent owns or allegedly has an interest in over 32 corporations or limited liability companies defined as “Related Entities” by creditors. There are also about 10 businesses defined as “Additional Entities” by creditors. The values of these business interests are extremely difficult to evaluate and 50 Cent’s creditors argue that the values of these entities are more than what was provided/disclosed in 50 Cent’s bankruptcy petition and schedules. As of Jan. 29, 2016, 50 Cent provides his total assets are worth $16,411,498.64.

50 Cent owns three pieces of real property: (1) primary residence located at 30 Poplar Hills Drive Farmington, CT 06032 with an estimated value of $8.25 million and mortgage of about $1 million owed to Suntrust Bank; (2) investment property located at 8 Gale Drive Valley Stream, NY 11581 with an estimate value of $572,000 and no debt; and (3) an investment property located at 3286 Northside Pkwy, Unit 302 Atlanta, GA 30327 with an estimated value of $464,000 and no debt. 50 Cent’s real property is worth about $8,286,000.

50 Cent’s vehicles have a scheduled total value of $500,618.00 and are as follows:

1966 Chevrolet Coupe
2015 Chevrolet Suburban
2010 Rolls Royce Phantom Drophea
2005 Chevrolet Suburban
2008 Dodge Sprinter
2003 Chevrolet Suburban
2012 Suzuki Kizashi Sport

One of the personal assets creditors of 50 Cent point out is missing from the bankruptcy petition and schedules is the trademark “50 Cent” which 50 Cent owns. Creditors argue that the trademark is very valuable and should be listed as a personal asset of 50 Cent.

50 Cent’s DEBTS

As of January 29, 2016, 50 Cent provides his debts total $32,390,319.34. The debt is comprised of $987,070.53 in secured debts, $770,412.00 in unsecured priority debts and $30,390,319.34 in general unsecured debts. The largest debt is a general unsecured debt owed to Sleek Audio, LLC, totaling $18,131,668.65 resulting from a judgment in a lawsuit over the design and sales of headphones. The other largest general unsecured debt is owed to Lastonia Leviston totaling $7,000,000 resulting from a judgment in a lawsuit about the alleged release of narrated sext tape by 50 Cent.

The unsecured priority debts are for domestic support totaling about $856,000 and taxes owed to the Internal Revenue Service totaling $175,067.91 and the State of New York totaling $1,379,687.

Status of the Chapter 11 Bankruptcy Reorganization

Right now both 50 Cent and three creditors, Sleek Audio LLC, Lastonia Leviston and Suntrust Bank, have proposed a Chapter 11 Plan of Reorganization. Of course the creditors plan provides for repayment of all of 50 Cents debts during the plan based upon his current income, assets and future earning potential. I have not yet reviewed the plan filed by 50 Cent and his bankruptcy attorneys.

Why Did 50 Cent File Bankruptcy When He Is Rich and Famous Still?


For the record many successful and rich people make the decision to file for bankruptcy protection under various chapters of the Bankruptcy Code. Curtis James Jackson, III, aka 50 Cent, is no different. Like many things in our society ignorance of the law rules the day. Hopefully this article and future articles about 50 Cent’s Chapter 11 bankruptcy case will help you understand bankruptcy law and why 50 Cent filed. That said, on July 13, 2015, 50 Cent filed a personal bankruptcy petition for protection under Chapter 11 of the Bankruptcy Code, Bankruptcy Case No. 15-21233, in the District of Connecticut, Hartford Division, to reorganize his debts.

Why Did 50 Cent File Bankruptcy?

The Merriam-Webster dictionary defines being insolvent as: (1) unable to pay debts as they fall due in the usual course of business; (2) having liabilities in excess of a reasonable market value of assets held. 50 Cent became unable to pay his debts as they came due in the usual course of business resulting from judgments entered against him and the cost of litigating with Sleek Audio and Lastonia Leviston lawsuits.

Sleek Audio, LLC Litigation

According to court documents back in 2011n 50 Cent entered into business with Sleek Audio, LLC to develop headphones and market the headphones under 50 Cent’s professional name. Sleek entered into a licensing brand agreement with G-Unit Brands, 50 Cent’s brand licensing company and allowed Sleek to use 50 Cent’s trademarks in the marketing of the headphones. For whatever reason Sleek did not follow through on making the headphone commercially viable by the February 15, 2011, deadline. As a result G-Unit Brands terminated the licensing agreement with Sleek and 50 Cent then created SMS Audio to develop his headphones on his own instead. Like most divorces Sleek did not go away quietly. Sometime in August 2011 Sleek filed an arbitration case against 50 Cent alleging he stole their designs for his new headphones and owed Sleek some money. Long story short Sleek won. Eventually a judgment was entered in Sleek’s favor totaling $17,247,426.11 plus post-judgment interest rate of 4.75%. 50 Cent’s list of 20 largest unsecured creditors provides the judgment has grown to $18,428,257.00 as of July 13, 2015.

Lastonia Leviston Sex Tape Litigation

Another reason for the personal Chapter 11 bankruptcy filing is a sex tape 50 Cent allegedly released of Lastonia Leviston without her consent. 50 Cent was in a rap war with William Leonard Roberts, aka Rick Ross. Ms. Leviston used to date Rick Ross and they have a child together. In 2008 Ms. Leviston was in a relationship with Maurice Murray. Leviston and Murray made a sex tape and Murray retained possession of the sex tape. At some point Murray gave the sex tape to 50 Cent and allegedly told 50 Cent he could do whatever he wanted with the sex tape. 50 Cent allegedly created a copy of the sex tape and then narrated the sex tape saying negative things about Ms. Leviston and mocking Rick Ross. 50 Cent alleged the edited version of the sex tape was leaked by someone other than himself and that he never released the edited sex tape on any of his websites. Ms. Leviston sued 50 Cent in state court and eventually she won a judgment for about $5 million (Leviston v Jackson, Index No. 102449-2010, pending before New York State Supreme Court, New York County).

July 13, 2015 Chapter 11 Bankruptcy Filing and Leviston Lawsuit

The jury in the Leviston lawsuit was then tasked with determining how much the punitive damages to punish 50 Cent for the alleged release of the edited sex tape should be. Before the punishment faze began 50 Cent filed for personal bankruptcy under Chapter 11 of the Bankruptcy Code. As soon as a bankruptcy petition is filed the automatic stay takes effect stopping any and all collection activity including lawsuits. So the day the punishment part of the state court lawsuit was supposed to start 50 Cent’s attorneys walked in with the notice of the bankruptcy filing and that ended the punishment faze for the time being. But, a creditor or party-in-interest, like Ms. Leviston, can request the bankruptcy court to allow a state court lawsuit to continue despite the filing of a bankruptcy case. This is what happened in 50 Cent’s bankruptcy case. Ms. Leviston’s Bankruptcy Attorneys filed what is called a motion for relief from the automatic stay on July 13, 2015, the exact same day 50 Cent filed for bankruptcy protection. Ms. Leviston asked the bankruptcy court to allow the state court punishment faze to continue despite the filing of the bankruptcy case. Ms. Leviston’s attorneys also requested and received an expedited hearing date to speed up the process.

Of course 50 Cent’s Bankruptcy Lawyers filed an opposition to the motion for relief from stay advocating why the stay should not be lifted. In my opinion the two most compelling reasons to not lift the automatic stay is that punitive or punishment damages are normally calculated based upon the wealth of the allegedly guilty party and that punitive damages claims are/can be subordinated or disallowed in bankruptcy pursuant to Section 510(c). When a person files for bankruptcy protection what the bankruptcy filer’s assets are worth is often a litigated issue because it matters a lot in the outcome of what creditors should receive through the Chapter 11 plan of reorganization. So how can a jury in the state court case determine the amount of punitive damages to award against 50 Cent if a determination of the value of his assets has not been made in the now pending bankruptcy case? Arguably punitive damages cannot be determined so why proceed? The other compelling argument in my opinion is how punitive damages are treated in bankruptcy. Generally punitive damages are disallowed or subordinated to other claims so that the other people who are owed money get paid more. The goal of bankruptcy is distribute the assets of the debtor to creditors fairly according to the Bankruptcy Code. The goal is not to punish the debtor like punitive damages seek to do. Therefore punitive damages are generally disallowed or paid after other types of claims are paid first. I will have more to day about this issue in future articles.

July 17, 2015, a hearing was held before the Honorable Ann M. Nevins regarding the motion for relief from stay and the motion was granted. As a result the punitive damages part of the Leviston lawsuit could continue. On July 20, 2015, the jury in the New York State Court lawsuit regarding the alleged release of the sex tape awarded an additional $2 million in punitive damages to Ms. Leviston for a total judgment against 50 Cent of $7 million. I am sure 50 Cent was not banking on the filing of his bankruptcy case to stop the punishment part of the lawsuit by Ms. Leviston. Nevertheless, there are still benefits to seeking bankruptcy protection and reorganizing his debts in Chapter 11.

So, 50 Cent found himself with a $17 million judgment against him owed to Sleek and then another judgment of $5 million owed to Ms. Leviston prior to filing for bankruptcy protection. Even if someone has significant assets and significant income can they write a $22 million check to satisfy their debts? That is why 50 Cent filed for bankruptcy protection under Chapter 11 of the Bankruptcy Code. What will result in 50 Cent’s Chapter 11 reorganization case is still to be determined. Additional articles will be posted to discuss 50 Cent’s current financial circumstances and current status of the case in the future.

Celebrity and Current Free Agent Vince Young Filed For Chapter 11 Bankruptcy


On January 17, 2014, ex-football play and celebrity Vince Young filed for bankruptcy protection under Chapter 11 of Title 11. Mr. Young filed in the Bankruptcy Court for the Southern District of California, Bankruptcy Case number 14-30400. Individuals with secured debts over $1,149,525.00 or unsecured debts exceeding $383,175.00 can reorganize their debts under Chapter 11 of the Bankruptcy Code. It is a much more expensive and complicated process then reorganizing debts under Chapter 13 of the Bankruptcy Code. The fact that Mr. Young filed for Chapter 11 is actually a very good sign regarding his financial situation. Time will tell if Mr. Young can confirm a plan of reorganization. Chapter 13 is reserved for individuals with debts of less than the debt limitations listed above. Chapter 13 is a much simpler, cheaper and streamlined process than reorganizing under Chapter 11.

As of right now Mr. Young’s bankruptcy lawyer has only filed the basic documents necessary to obtain an order for relief and begin the bankruptcy process. It is sometimes called a skeleton petition. There are no schedules of assets, income or expenses filed with the bankruptcy petition. The only indication of Mr. Young’s assets or debts are the boxes checked on the voluntary petition indication the number of creditors (1-49), amount of assets of Mr. Young ($500,001 – $1 million) and debts ($1,000,001 – $10 million. According to these ranges Mr. Young’s debts could far exceed his assets, but what we do not know from anything filed yet is Mr. Young’s income. For someone signed a contract for $58 million contract, with $26 million guaranteed, it is sad to see his asset range of only $500,001 to $1 million. It is early in the bankruptcy case and very little is known. The list of creditors sheds a little more light on the case though. The creditor list provides 20 creditors. A few of those owed money are America’s Servicing Company (mortgage), Applied Visuals, BMW Financial, Brian D. Jewab, David A. Chaumette, Exotic Diamonds, Jeff Heard, Major L. Adams II, Peoples Financial Services, Pro Player Funding LLC, Ronnie T. Peoples and Wells Fargo.

On the upside, there are many possible ways to successfully reorganize debts whether secured or unsecured. Hopefully Mr. Young has a decent income still and assets that will provide his bankruptcy attorney with options to help successfully reorganize Mr. Young’s debts.

One of the problems with reorganizing debts in a Chapter 11 case is the administrative expenses charged. This is includes the fees and costs for the bankruptcy filer’s attorney, the attorney for the unsecured creditors’ committee counsel (if any), accountants and other professionals that have a right to file fee applications for approval of their fees from the assets of the bankruptcy estate. Many creditors receive little to nothing after professionals incur high fees in administering the bankruptcy case. A bankruptcy estate of $2 million dollars can quickly become only $1.5 million or less after professional fees are approved and paid. That is a 25% decrease in assets available for the benefit of creditors. Please continue to check in on our Bay Area Bankruptcy Buzz blog for more information about Mr. Young’s bankruptcy case. We will be providing further information as the case unfolds.

Los Angeles Dodgers File for Bankruptcy Protection

By Ryan C. Wood, Attorney at Law

On June 27, 2011, the Los Angeles Dodgers, LLC (11-12010-KG), and Los Angeles Dodgers Holding Company, LLC (11-12011-KG), filed for bankruptcy protection in the United States Bankruptcy Court, District of Delaware under Chapter 11 of the Bankruptcy Code.  After weeks of speculation, reports that the Dodgers would not be able to make future payroll obligations, and numerous complications due to the McCourt divorce, the Dodgers have sought the same bankruptcy protection millions of Americans have sought over the last five years.

Like so many people struggling with burdensome debt, the Dodgers finally succumbed to their mounting debt and uncertain future.  Hopefully the Dodgers have made a sound business decision to file for bankruptcy protection.  Just like individuals who file for bankruptcy protection, bankruptcy provides structure and certainty when finances are stretched too thin.  Millions of Americans have filed bankruptcy to get a fresh start and obtain relief bankruptcy can provide.  What many critics of bankruptcy do not understand is that financial turmoil can happen to anyone.  Look at the Dodgers now.

According to Court documents the single largest creditor of the Dodgers is Manny Ramirez.  Mr. Ramirez is still owed a whopping $20,992,086.  The next largest creditor is Andruw Jones, who is owed $11,075,000.  The Dodgers petition for bankruptcy protection also listed the following creditors and amounts owed at the time of the filing: Hiroki Kuroda $4,483,516; Rafael Furcal $3,725,275; Chicago White Sox $3,500,000; Theodore Lilly $3,423,077; Zach Lee $3,400,000; Kazuhisi Ishii $3,300,000; Juan Uribe $3,241,758; Matthew O. Guerrier $3,090,659; Juan Pierre $3,050,000; Marquis Grissom $2,719,146; Jon S. Garland $1,211,538; Levy Restaurants $588,322; Andre E. Ethier $559,066; Jamey Caroll $508,791; Alexander Santana $499,500; Jonathan R. Broxton $423,077; Chad Billingsly $379,258; Continental Airlines $339,403; Vincent E. Scully $152,778.

Frank McCourt originally purchased the Dodgers from Fox Entertainment Group, Inc. in 2004 for $350 million.  Mr. McCourt purchased the Dodgers stadium, the land under the stadium and some 250 acres around the stadium including the parking lots.  Part of the purchase price was financed by Fox Entertainment Group, Inc. totaling some $125 million.  Mr. McCourt secured the financing by using 24 acres of undeveloped land in Boston as collateral.  In an early signed of what was to come, Mr. McCourt had to transfer the 24 acres to the Fox Entertainment Group, Inc. to repay the $125 million in financing.

In 2005 and then in 2007, Mr. McCourt and the Dodgers refinanced debt and obtained an additional $140 million in funds to improve and upgrade Dodger Stadium.  The refinance of existing debt in 2005 and the funds obtained in 2007 were secured by the income stream from future tickets sales.  The main problem forcing the Dodgers into bankruptcy was the falling attendance numbers this year following their success during the 2008 and 2009 seasons.  The fact that the collective bargaining agreement is ending did not help either.  Given that the collective bargaining agreement is ending, certain cash reserves have to be kept to pay deferred compensation and other compensation, which would not normally have to exist.  The Dodgers also cite the appointment of a monitor by Major League Baseball as a cause for decreased ticket sales.

The Dodger’s story is not much different than many stories of Americans around the United States.  Due to layoffs, reductions in pay and reductions in hours worked many Americans are facing the same cash crunch the Dodgers experienced when attendance fell in 2011.  The bottom line is bankruptcy can happen to anyone depending upon the circumstances.  The perfect storm of financial struggle is unfortunately waiting for many.  For more information about bankruptcy from an experienced San Mateo bankruptcy lawyer or San Jose bankruptcy lawyer, call toll free 1-877-9NEW-LIFE.