Wednesday, September 11, 2019

Federal prosecutors probing NYC taxi industry in wake of driver suicides: report

By Stephanie Pagones | Published September 10, 2019 | Transportation | FOXBusiness
Manhattan federal prosecutors are probing possible lending fraud in the New York City taxi industry, according to a report.

The Southern District of New York has been investigating possible crimes, such as bank, mail and wire fraud, over the past month in the wake of a string of suicides involving cabbies who were bogged down by heavy debt related to the ever-increasing cost of taxi medallions, The New York Times reported, citing sources with knowledge of the inquiry.

A U.S. Attorney's Office representative declined to comment to the Times.

The cost of a taxi medallion rose from $200,000 in 2002 to $1 million in 2014, the report states, while industry heads or medallion brokers used questionable lending tactics or provided their clients “insufficient or unclear information,” according to and Executive Summary released this summer by the City of New York pursuant to a 45-day review into the industry’s methods.

As much as 95 percent of the city’s taxi drivers are immigrants, the summary states, many of whom speak English as a second language.

“For current drivers, the largest single issue they face is an unaffordable level of debt. The average median debt owed by surveyed drivers is approximately $500,000,” according to the city record. “[Fifty-one percent] of surveyed drivers stated they struggle to pay their monthly bills and 26% stated they are considering bankruptcy.”

In fact, over 900 livery cab drivers have declared bankruptcy, the Times reported.

The Times interviewed an immigrant from Bangladesh who bought his taxi medallion in 2014 and signed a loan that required him to pay $1.7 million, even though his annual income was only about $30,000. He told the Times that he did not understand the terms of his loan, according to the report.

New York Attorney General Letitia James announced in May she would be conducting her own review of the matter.

Thursday, September 05, 2019

Bankruptcy Filings are on the Increase

Bankruptcy Filings are on the Increase
A recent article in Yahoo Finance noted that bankruptcy filings are on the increase ( ; producer is Yvette Killian).
The article states that according to the American Bankruptcy Institute, U.S. bankruptcy filings in July 2019 were up 3% from the same time a year ago. The article continued to state that “bankruptcy filings are on the rise as Americans pile up more debt. The latest ABI data pegs household debt near $14 trillion, which is $1 trillion more than the 2008 Great Recession peak.”
At Shenwick & Associates we have been extremely busy this summer with bankruptcy filings and workouts for both individuals and businesses, and we expect this trend to continue in 2019 and 2020 given the rise in debt usage.
In Jim Shenwick’s  opinion  in New York , we are seeing a “Tale of Two Cities”  in that a segment of the population is doing extremely well, but many sectors in the city are hurting and at risk.
Uber, Via and Lyft have hurt taxi medallion owners. Last month's taxi medallion sales were at approximately $130,000 per medallion, down from $1,300,000 three years ago. Politicians have not successfully addressed these issues to date.
Vanguard has hurt the hedge fund industry, with many funds closing.
Amazon is hurting retail and many retail stores in the city are closing, evidenced by the vacant storefronts we see on each block.
Restaurants have been hurt and continue to be hurt by the increase in the minimum wage to $15 per hour, which has squeezed the bottom line.   Many restaurants have closed or filed for bankruptcy as they are no longer profitable. Restaurant owners have also individually filed bankruptcy due to property lease guarantees they may have signed. 
Many young people are overburdened by student loans and have substantial credit card debt.
Bankruptcy or out of court workouts may be a solution for some of the above-mentioned problems faced by individuals and businesses, and Jim Shenwick 212-541-6224  can assist with those issues. 

James Shenwick
Shenwick & Associates
122 East 42nd St. (42nd & Lex. Ave SW Corner)
Ste 620
New York, N.Y. 10168
Bankruptcy & Creditor’s Rights
“We always appreciate referrals”
(W) 212-541-6224 ext. 113
Cell Phone: 917-363-3391
Fax 646-218-4600 
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