Michael Vick, the former Atlanta Falcons quarterback, is serving a 23-month prison sentence after pleading guilty to federal dogfighting charges last year. “He was subsequently suspended indefinitely without pay and lost all his major sponsors, including Nike.” Vick filed for Chapter 11 bankruptcy Monday in the Eastern District of Virginia. The debt includes part of a signing bonus that the Falcons are seeking to recover.

According to the bankruptcy filing, “Vick cites debts of $10 million to $50 million and a comparable amount of assets.” The Falcons tried to recover about $20 million in bonuses Vick earned from 2004 to 2007. But a federal judge held that “Vick is entitled to keep $16 million and must return $3.75 million of the money paid to him for playing football through the 2014 season.”

Other creditors with claims against Vick include Wachovia Bank and the Royal Bank of Canada. “A federal district court in Atlanta ruled that Vick must repay $1.1 million to Wachovia for defaulting on a loan to open a liquor store and restaurant.” “That decision came less than a week after a judge ruled that Vick must repay the Royal Bank of Canada $2.4 million for defaulting on yet another loan.”

Here is a link to the article:
http://biz.yahoo.com/law/080710/548d6774bfa2b01a74252644467a189a.html?.v=1

Another link on the subject:
http://www.usatoday.com/sports/football/nfl/2008-07-08-vick-bankruptcy_N.htm?csp=34

Yameena

The FBI said that "it has arrested more than 400 real estate brokers since March in a crackdown on incidents of mortgage fraud that have contributed to the country's housing crises." Apprehensions were made all over the country including Chicago, Atlanta, Miami and suburban Maryland.

"Operation Malicious Mortgage resulted in 144 mortgage fraud cases in which 406 defendants were charged." A law enforcement officer stated that the losses to the victims in these schemes totals more than $1 billion.

The Justice Department and FBI announced the arrests at a news conference in Washington. On Wednesday alone, "60 arrests were made in mortgage fraud-related cases in 15 districts."

A news station also reported that the indictment of two former Bear Sterns managers in New York was also a part of Operation Malicious Mortgage. "They are the first executives to face criminal charges related to the collapse of the subprime mortgage market."

Houston Arrests

In Houston, six people are suspected of defrauding banks and stealing $24 million dollars in fraudulent mortgage scams.

The indictment alleges, "phony buyers were recruited to apply for loans to buy pricey condominiums in Houston and surrounding suburbs." "The loan applications allegedly used fraudulent information to obtain millions of dollars that the defendants then pocketed," the indictment said.

The defendants were charged with conspiracy, fraud and money laundering.

Here is a link to the article:
http://www.kctv5.com/money/16652452/detail.html

Yameena

LandSource Communities Development LLC, a California property developer backed by Calpers, filed for bankruptcy protection under Chapter 11 Sunday. Calpers (California Public Employees' Retirement System) is the largest public pension fund in the United States.

LandSource's largest investment is The Newhall Land and Farming Company, that owns 15,000 acres north of Los Angeles in Santa Clarita Valley, California. The undeveloped property declined in value and triggered an additional charge on the $1.24 billion loan LandSource has been trying to restructure for months. When LandSource missed it's last payment it received a default notice on April 22nd.

LandSource spokeswoman, Tamara Taylor, said, "LandSource believes chapter 11 provides the most effective means for the partnership to preserve the values of its business...while it works with creditors to achieve a long-term restructuring".

You can read the entire articles at:
http://news.yahoo.com/s/ap/20080609/ap_on_bi_ge/calpers_land_partnership_2&printer=1;_ylt=A9G_R3tFXE1IkfoAWR9v24cA
and
http://news.yahoo.com/s/nm/20080609/bs_nm/landsource_dc_1&printer=1;_ylt=AgBfFtrUdCrRoHM6OCC5G3.b.HQA

Chandra

Vallejo, California filed for bankruptcy protection under Chapter 9 (available only to municipalities and a form of reorganization, not liquidation) last Friday in the Eastern District of California. The city has been struggling with personnel costs and low taxes from the housing market. The voluntary petition estimates between one to five thousand creditors, $500 million and $1 billion in assets, and $100 to $500 million in debt. The largest claim for $219,300,816 (which accounts for over half of the total) is for the city retirees.

As you might know, we have been following the potential bankruptcy filing for the city for several months now. The city has been negotiating with the unions for the past year concerning wage cuts to keep the city out of bankruptcy. The financial audits conducted for the city have shown that it would run out of money in its operating account by the end of June.

Vallejo is the largest city ever to file for bankruptcy protection in California; with over 120,000 residents. The most famous Chapter 9 filing was by Orange County, California filed on December 6, 1994. The county treasurer lost $1.7 billion of the investment pool on Wall Street securities. The county didn't emerge from the reorganization for 18 months.

Other California cities that have filed for bankruptcy under Chapter 9 are:

Coalinga in 2003 with a population of approximately 12,000;
Desert Hot Springs in 2001 with a population of approximately 17,000;
Dinuba in 2001 with a population of approximately 17,000; and
Calexico in 1995 with a population of approximately 19,000.

Vallejo is the birth city of several famous individuals, actor Raymond Burr and musicians Roy Rogers and E-40, just to name a few.

You can read an article discussing the filing at:
http://amlawdaily.typepad.com/amlawdaily/2008/05/vallejo-turns-t.html

Chandra