Car debt is piling up as more Americans owe thousands more than vehicles are worth

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Chris Martin knew he needed a bigger car as the birth of his fourth child approached, but he and his wife were already $14,000 underwater on their two vehicles.

Car debt is piling up as more Americans owe thousands more than vehicles are worth

So the couple proposed an unusual two-for-one deal with an Atlanta-area auto dealer in 2020: trading in both of their vehicles so they could afford a three-row Ford Explorer. Their total loan after factoring in negative equity, a service contract, fees and other costs ballooned to $66,000 on the $49,000 Explorer

Story by Bloomberg

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D.A. Bragg Announces Creation of Office’s First “Worker Protection Unit” to Combat Wage Theft, Protect New Yorkers From Unsafe Work Conditions

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Manhattan District Attorney Alvin L. Bragg, Jr., today announced the creation of the Office’s first-ever Worker Protection Unit to investigate and prosecute wage theft and other forms of worker harassment and exploitation across Manhattan’s many industries. Building on the success of the Office’s Construction Fraud Task Force, which will be part of the Worker Protection Unit, the Unit will pursue criminal charges against individuals and corporations that jeopardize their workers’ safety and steal their wages.

D.A. Bragg also announced the creation of a first-ever Stolen Wage Fund for Manhattan victims of wage theft, funded through the D.A.’s Criminal Justice Investment Initiative and operated in partnership with the New York State Department of Labor.

Finally, in an effort to allow the Unit to bring appropriately strong charges against individuals and companies that cheat their workers, D.A. Bragg joined Assembly member Catalina Cruz and State Senator Neil Breslin to support their bill that would enable prosecutors to charge wage theft as larceny.

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Foreclosure activity in January may set the course for 2023

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Foreclosure activity picked up to start the year, even as repossessions saw their first decline since summer 2021, according to real estate data intelligence provider Attom.

January foreclosure filings, which include notices of defaults and auctions in addition to repossessions, increased 36% on an annual basis to a total of 31,557 units, which could be a concerning sign for the rest of the year, according to Attom CEO Rob Barber. The number edged upward by 2% compared to December’s 30,822.

By  Spencer Lee

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FTX Bankruptcy Judge Denies Request for Independent Examiner

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The judge presiding over the bankruptcy of cryptocurrency exchange FTX has denied a request by the U.S. bankruptcy trustee to appoint an independent examiner in the case.

DOVER, Del. (AP) — The judge presiding over the bankruptcy of cryptocurrency exchange FTX has denied a request by the U.S. bankruptcy trustee to appoint an independent examiner in the case.

The trustee, who serves as a government watchdog in Chapter 11 reorganizations, argued that the company’s financial affairs and business operations, including allegations of unprecedented fraud leading to its collapse, should be reviewed by a disinterested person, not left to an internal investigation.

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Now that pandemic aid has vanished, bankruptcies are on the rise

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The end of federal pandemic aid is putting many Americans and businesses under mounting financial pressure, leading to a spike in bankruptcies.

Total bankruptcy filings in January shot up 19% in January to 31,087, up 19% from a year ago, according to data from Epiq, a legal research firm. The number of Americans who filed for bankruptcy across Chapters 7, 11 and 13 shot up 20% in January from a year ago.

The surge in filings comes as rising interest rates and high inflation continue to stress household budgets.

“There’s no cash coming in from the government anymore,” Amy Quackenboss, executive director at the American Bankruptcy Institute, told CBS MoneyWatch. “Some people are finally experiencing that economic crunch. They’re having to pay their mortgage, their car payments. There are several people who haven’t been able to weather that storm.”

By KHRISTOPHER J. BROOKS

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RETAIL Bed Bath & Beyond lines up funding in a last-ditch bid to avoid bankruptcy

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Bed Bath & Beyond will live to see another day – at least for now.

The beleaguered home goods retailer has finalized a Hail Mary stock offering that’s expected to infuse more than $1 billion in equity into the company in hopes it’ll stave off bankruptcy and liquidation, the company announced Tuesday.

Bed Bath brought in $225 million in the offering and expects to see another $800 million in proceeds over time, it said.

The company also secured another $100 million loan from Sixth Street Partners, one of its lenders. B. Riley Securities was the sole bookrunner for the offering, Bed Bath said.

Bed Bath’s stock fell more than 48% on Tuesday. Its market value is about $353 million.

The cash infusion will be used to pay some of the retailer’s debts after it defaulted on a loan with JPMorgan last month and missed a $25 million interest payment on Feb. 1, the company said in securities filings.

Whatever’s left over will be used to aid Bed Bath’s attempt at a turnaround, the company said. However, it warned that if the deal doesn’t work out, it will “likely” file for bankruptcy and see its assets liquidated.

To keep costs low, Bed Bath wants to significantly reduce its brick and mortar footprint to 480 total stores – 360 with the Bed Bath banner and another 120 Buy Buy Baby stores, the company said in a news release.

The company said in a filing Monday that it would close an additional 150 Bed Bath stores. It had already shuttered 200 of its namesake stores and 50 of its Harmon Face Values locations. It had 955 stores open at one point earlier last year.

– CNBC’s Lillian Rizzo contributed to this report.

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NY assembly finds ‘overwhelming evidence’ Cuomo engaged in sexual harassment

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The New York state Assembly Judiciary Committee said Monday it found “overwhelming evidence” that disgraced former Gov. Andrew Cuomo engaged in sexual harassment while in office, concluding an eight-month impeachment investigation into multiple allegations of misconduct.

The judiciary committee’s 60-page report, which detailed the investigation by law firm Davis Polk & Wardwell LLP, said Cuomo “engaged in multiple instances of sexual harassment, including by creating a hostile work environment and engaging in sexual misconduct.”

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Corporate Bankruptcies Hit Precipitous High in March

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Nearly double the number of companies entered bankruptcy in March than in February, the largest number in a single month since July, according to S&P Global Market Intelligence.

A total of 61 companies entered bankruptcy last month, and while the pace of filings has slowed year-over-year, that number hearkens back to the dog days of summer 2020, when every day brought a new big-name BK. As of March 31, a total of 138 U.S. companies have filed bankruptcy; last year, 153 had filed by the same date.

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The 10 biggest retail bankruptcies of 2020

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More than three dozen retailers, including the nation’s oldest department store chain, filed for bankruptcy this year, marking an 11-year high.

Pre-pandemic, several of these retailers were already teetering on the brink of survival. But the Covid health crisis pummeled the industry. Lockdown orders put in place in March to slow the spread of the virus turned into prolonged store closures for many businesses that didn’t sell essential items like groceries. Retailers that started 2020 already in a tough spot were hit harder. Liquidity was strained and sales went into a freefall.

“The magnitude of bankruptcies has been larger this year compared to previous years,” said David Berliner, chief of BDO’s business restructuring and turnaround practice. “You’re noticing national brands and other prominent franchises, that had hundreds of stores, now being liquidated or going through a restructure to salvage what they can.”

About 60% of the retailers that had filed for bankruptcy in 2020 through August listed more than $100 million in assets, compared with 50% of filings during the same period in 2019 and 36% in 2018, Berliner said.

Neiman Marcus, J.C. Penney, Ascena Retail Group and Tailored Brands have now joined the ranks of some of the all-time biggest retail bankruptcies on record — including Sears, Toys R Us and Circuit City.

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Purdue Pharma proposes $10 billion plan to come out of bankruptcy

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Purdue Pharma, which helped revolutionize the prescription painkiller business with its drug OxyContin, is proposing a $10 billion plan to emerge from bankruptcy that calls for it to be transformed into a different kind of company funneling profits into the fight against the nation’s intractable opioid crisis.

Those efforts would include a significant boost – more than $4 billion – from members of the Sackler family who own the Connecticut-based pharmaceutical giant.

The plan, filed late Monday night in U.S Bankruptcy Court in White Plains, N.Y., after months of negotiations, marks the company’s formal offer to settle more than 2,900 lawsuits from state and local governments, Native American tribes, hospitals and other entities.

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