Thursday, December 13, 2018

November 2018 TLC medallion sales


The November 2018 New York City Taxi & Limousine Commission (TLC) sales results have been released to the public. And as is our practice, provided below are Jim Shenwick’s comments about those sales results.

1. The volume of transfers rose again from October. In November, there were 154 unrestricted taxi medallion sales.

2. However, almost all those transfers were bankruptcy and foreclosure transfers!

3. 50 of the 154 sales were foreclosure sales, which means that the medallion owner defaulted on the bank loan and the banks were foreclosing to obtain possession of the medallion. We disregard these transfers in our analysis of the data, because we believe that they are outliers and not indicative of the true value of the medallion, which is a sale between a buyer and a seller under no pressure to sell (fair market value).

4. And in an unprecedented development, 93 of the sales (60%) were sales of medallions in bankruptcy proceedings.  As these sales are constrained by debtors’ and trustees’ need to liquidate distressed assets, we also disregard these transfers in our analysis.

5. The large volume of foreclosure and bankruptcy sales (approximately 93%) is in our opinion evidence of the continued weakness in the taxi medallion market.

6. The eleven regular sales for consideration ranged from a low of $140,000 (one medallion) to $175,000 (two medallions), $180,000 (seven medallions) and a high of $320,000 (one medallion).  

7.  The fact that 93% of all transfers in November 2018 were either the result of bankruptcy filings or foreclosure sales shows continued weakness in the taxi medallion market and no sign of a correction.

Please continue to read our blog to see what happens to medallion pricing in the future. Any individuals or businesses with questions about taxi medallion valuations or workouts should contact Jim Shenwick at (212) 541-6224 or via email at jshenwick@gmail.com.

Tuesday, December 04, 2018

Crain's New York: TLC approves historic pay rules for app-based drivers

By Matthew Flamm

The Taxi and Limousine Commission made history on Tuesday morning when its commissioners voted to set the first minimum pay-rate in the nation for app-based drivers. 

Driver groups are declaring victory on—and claiming credit for the win—while Uber, Lyft and Juno found a lot to complain about. Only the pooled-ride service Via, which already pays its drivers better than minimum wage, applauded the changes.

The rules, which will go into effect in 30 days, call for minimum gross pay of $26.51 per hour, which will boil down to $17.22 after expenses. That is the equivalent for an independent contractor of $15 per hour, including paid sick leave and payroll taxes.

Most drivers, a TLC-commissioned study found, earn about $11.90 an hour. On an annual basis, the new rules will mean a raise of more than $9,000.

Copyright © 1996-2018. All Rights Reserved.

New York Times: Why Are Taxi Drivers in New York Killing Themselves?

By Emma G. Fitzsimmons

A taxi driver named Roy Kim recently became the eighth professional driver to die by suicide in New York over the last year.

The city’s taxi commissioner, Meera Joshi, has characterized the deaths as an epidemic. The stories have drawn attention to the economic despair in the industry and prompted the City Council to weigh new legislation to help taxi owners reduce their debt and to increase driver wages.

Each case is different and it is difficult to know why someone decides to take their life. Most of the drivers were immigrants in their 50s and 60s, some of whom had told friends and family that they were having a difficult time making a living as Uber began to dominate the ride-hailing industry.

Three of the drivers owned a taxi medallion — the aluminum plate required to drive a cab in New York that once sold for more than $1 million. It is now worth as little as $200,000.

Here’s what we know about Mr. Kim and the broader crisis:
Mr. Kim was a 58-year-old Korean immigrant who lived in Queens. He had driven a taxi for more than four years and bought a medallion last year for about $578,000 — an occasion he celebrated by having a sushi dinner with a driver he met years ago while waiting for passengers at Kennedy International Airport.

But Mr. Kim had complained to friends this year that he could not find fares. He began working more often, eventually driving seven days a week. Still, his friends were surprised by his death.

“There’s no other reason but the financial aspect,” said Kyung Ryong Kang, a friend and fellow driver who had celebrated at dinner with him last year. “It was harder and harder to survive.”

On Nov. 5, Mr. Kim was found hanging by a belt from the doorway to his bedroom, the police said.

He had an adult son who lives in South Korea. Friends have been unable to reach Mr. Kim’s son.



“He was a generous person and always bought coffee for us,” he said.
Two other drivers who took their lives also owned taxi medallions: Nicanor Ochisor, who was from Romania, and Kenny Chow, who was from Burma. Both told friends they were worried about paying off their debt.
In February, a black-car driver named Douglas Schifter killed himself with a shotgun in front of City Hall. He had written on Facebook that Uber had flooded the streets with vehicles and complained about having to work 100 hours a week to survive.

Drivers for Uber and other car services have also raised concerns about low wages. The other drivers who died by suicide were: Fausto Luna, an Uber driver; Abdul Saleh, a taxi driver who had leased his vehicle; Danilo Castillo, a livery driver; and Alfredo Perez, a livery driver.

“This tragedy underscores the importance of finding new ways for government, the industry and lenders to work in unity to address the financial challenges that are weighing so heavily on our licensees,” Ms. Joshi said in a statement after Mr. Kim’s death.

In August, the City Council approved a cap on Uber and other ride-hail vehicles — the first major American city to do so. The Council is considering a separate set of bills that would establish a health fund for drivers and create “driver assistance centers” to offer mental health counseling and financial advice.

Corey Johnson, the Council speaker, said the city was also looking at options to help medallion owners saddled with massive debt, from a partial bailout to a hardship fund. The New York Taxi Workers Alliance, a group that represents drivers, is urging the city to work with banks and philanthropic groups to write off 20 percent of taxi owners’ outstanding debt.

At the vigil for Mr. Kim, the group’s leader Bhairavi Desai had a message for taxi drivers who are struggling: The city is finally addressing the problem and things will get better soon.

“We know change is coming,” she said.

After Mr. Ochisor’s death, his family raised more than $30,000 to help pay off his medallion. An anonymous donor also contacted his son Gabriel Ochisor, wanting to help longtime drivers like his father. The donor sent him a batch of money orders, each worth $1,000, to deliver to 217 owners who bought their medallion before 1990 and still drive their taxi.

Mr. Ochisor is trying to reach all of the drivers to mail the gifts, which will be sent with a letter from the donor.

“Please know that your 3 decades (or more!) of service are appreciated and that my life has been made better by your having worked the streets,” the letter says.

© 2018 The New York Times Company.  All rights reserved.

Wednesday, November 28, 2018

Repossessions of Taxi Medallions by Secured Lenders


Here at Shenwick & Associates, an increasing part of our law practice involves workouts of loans for borrowers with taxi medallions as collateral for the loan.   Over the past three months, we’ve noticed a trend in which the bank or secured lender repossesses the taxi medallion(s) when the loan is in default, instead of allowing the borrower to retain the medallions during workout negotiations.

Under New York law, the security agreement and other loan documents, lenders can repossess taxi medallions, which usually happens on nights or weekends when the cab is not in use.  Typically, the Marshal will crowbar the medallion off the dashboard and take the rate card.  Although the cab is not repossessed, if the cab is subject to a vehicle loan that is in default, the cab may also be repossessed.

Some borrowers have asked us why the lenders repossess the medallions without notice to the borrowers.  New York law and the loan documents signed by the borrower provide that no notice is required for the lender to exercise its remedy of repossession.  And if borrowers were noticed in advance of the repossession, lenders would run the risk of the collateral medallion(s) being hid from the lender!  Accordingly, if you own a medallion and the loan is in default, you may want to park the taxi in a garage or in a location other than on the street.

For borrowers whose medallions are in default, many workouts will ultimately end with surrender or repossession of the medallion.  In certain cases, surrender or repossession of the medallion can end litigation or other collection efforts by the lender.

Taxi medallion loan borrowers and guarantors whose medallion(s) were repossessed still run the risk of a deficiency judgment for the balance of the loan by the borrower or a judgment against the guarantor.  Some lenders may forbear from seeking a deficiency judgment once the medallion is repossessed, but borrowers need to be aware that loan documents allow for that remedy until the statute of limitations has run.  In New York, the statute of limitations for a lender to seek the deficiency balance from a borrower is six years.  In many cases when a lender obtains a deficiency judgment, we negotiate a discounted settlement by threatening bankruptcy or by having the client file for bankruptcy.

Another factor that repossessed taxi medallion owners must consider is relief of indebtedness income pursuant to § 108 of the Internal Revenue Code. Simply stated, if a taxi medallion owner owes a bank $1,000,000 and only repays the bank $500,000, then the tax law provides that they must recognize $500,000 of income on their tax return. Borrowers need to discuss this potential issue with their accountant or tax advisor during settlement negotiations.

For more information about defaulted taxi medallion loans and repossessed medallions, please contact Jim Shenwick.

Tuesday, November 27, 2018

Fisher & Phillips: NYC Council Passes 6 More Bills Protecting Ride-Sharing Drivers

Thursday, November 15, 2018

Credit repair services


Here at Shenwick & Associates, as an adjunct to our bankruptcy and debtor/creditor practices, we also offer credit repair services.  Although the three major credit reporting agencies (Experian, Equifax and TransUnion) (“CRAs”) have received positive press recently for implementing the National Consumer Assistance Plan (NCAP) in March (which, among other things, prohibits reporting of medical debts until after a 180-day waiting period and prevents traffic and parking tickets or fines from appearing on credit reports), clients still complain about receiving credit reports that are riddled with errors, particularly after a bankruptcy filing.

The first step in the process is to obtain a copy of the credit report from each of the three CRAs.   AnnualCreditReport.com allows you to request a free copy of your credit report every 12 months from each CRA.  Credit Karma also provides individuals with free Equifax and TransUnion credit reports. Credit reports need to be carefully reviewed and any erroneous information marked with a clear explanation of what is incorrect.

Once we have copies of the credit reports, we can analyze them and prepare letters to the CRAs requiring that errors on credit reports be corrected pursuant to federal law and/or New York State law.  CRAs are governed by the federal Fair Credit Reporting Act and the New York Fair Credit Reporting Act. These statutes detail the consumers’ rights to dispute information on their credit reports and how long negative information can remain on their reports.

Once we mail the CRAs a letter disputing the erroneous information, it usually takes about a month for the CRA to investigate the dispute and send the consumer the results of the investigation.  We then advise the client to obtain another credit report and review that credit report for errors. We’ve often found that it takes two or more letters to fully correct erroneous information.  Another option is to add a one hundred word personal statement to your credit report.

For more information about our credit repair services, please contact Jim Shenwick.