Party City files for Bankruptcy with plans to restructure mounting debt-is the party over?
CNBC is reporting that Party City has filed for Bankruptcy protection. The story can be found at
https://www.cnbc.com/2023/01/18/party-city-files-for-bankruptcy-to-restructure-piling-debt.html
Jim Shenwick, Esq. 212 541 6224 jshenwick@gmail.com
Many individuals are not aware that Social Security benefits can be used to pay student loans that are in default. The Social Security Administration (SSA) can take up to 15% of a persons benefits to pay off defaulted student loans; however, it cannot take more than $750 a month or $9,000 a year to pay for defaulted student loans.
For further details see the Fox Business article at https://www.foxbusiness.com/personal-finance/student-loans-default-diminish-social-security-benefits
Regrettably these defaults often impact retired parents who have taken out student loans for their children or Parent Plus Loans.
Jim Shenwick Esq. 212 541 6224 jshenwick@gmail.com
Office Lease Closing, Termination, or Surrender in New York City
As many readers of our emails and blog are aware, at Shenwick & Associates we are helping many small businesses close, terminate or surrender their office leases in New York.
As a result of the cooling labor market, many industry experts predicted employers would have more leverage to force their employees back to work. However, with the recession and troubled economy in New York City, we are seeing more and more small businesses close their offices and surrender, abandon or terminate their leases to cut costs.
A recent study by a Columbia business professor stated that to provide a seat for an employee in Manhattan costs the employer $16,000 per year. It is important to note that the Columbia business professor referred to a "seat" rather than an "office". Providing an office for every employee would cost substantially more than $16,000 per year.
We were recently retained by a small garment center company that was struggling and wanted to move to a remote work structure to save business and money. The facts of the case are interesting and illustrative: the company owed $65,000 in rent and additional rent to its landlord. For them to be released from the guaranty, they needed to give the landlord three months notice and be current on their rent (total amount owed to landlord over $100,000).
Jim Shenwick, Esq. was retained by the company and we reviewed the commercial lease, the guaranty, the financials' for the company and the guarantor.
We formulated a strategy and negotiated a very favorable deal for our client.
As part of the agreement, the tenant vacated the space quickly, abandoned its buildout to the landlord, forfeited its security deposit, and paid the landlord $25,000. The landlord agreed to release the company and the guarantor.
The result was a "win/win" for all parties, the landlord obtained possession of its space quickly without incurring legal fees and court costs, the company saved approximately $75,000 in rent payments and the guarantor was not sued and did not have to file for bankruptcy.
Jim Shenwick, Esq has experience in commercial leasing, workouts and bankruptcy and clients can contact him at 212 541 6224 or jshenwick@gmail.com
Excerpts from the Elon Musk story are below.
Elon Musk, who was a skeptic of the benefits of remote work, recently announced that he was closing the Twitter offices in Seattle. The Seattle Times had a fascinating article about musk's move, the article can be found at https://www.seattletimes.com/opinion/musks-about-face-on-remote-work-shows-its-value-in-recession/
The article stated in part that "As part of ongoing cost-cutting measures under new owner and CEO Elon Musk, Twitter is shutting down its Seattle offices and instructing employees to work remotely. That’s despite Musk earlier claiming that remote workers are only “pretending to work” and banning remote work at Twitter upon taking it over in early November.
So what explains his change of heart? Apparently, it’s the costs associated with the company’s Seattle office: rent and services such as cleaning and security.
The fact that Musk — an extreme skeptic of remote work — acknowledged its cost-cutting benefits illustrates the future of remote work for the U.S. economy. It highlights the misleading nature of many headlines about how an impending recession would lead to the end of remote work.
They claim that a cooling labor market will give executives more control to require employees to return to the office. That’s because many employees prefer to work remotely and most executives want their employees in the office.
However, the reality is much more complex. Of course it’s true that during a recession, employers have more leverage. At the same time, executives need to focus on maximizing the return on investment from their employees.
In times of economic growth, executives have more freedom to make decisions based on their personal preferences and intuitions. But during a recession, they may need to hunker down, be more disciplined, and rely on data to make decisions that make the most financial sense for the company — like Musk choosing to have Twitter staff work remotely for the sake of cutting costs. This focus on profitability over personal preferences benefits remote work."
Jim Shenwick, Esq jshenwick@gmail.com 212541 6224
The New York Times has an article about "What to Know About Biden’s Income-Driven Repayment Proposal". The story can be found at https://www.nytimes.com/2023/01/10/your-money/student-loans-income-driven-repayment.html.
The Income-Driven Repayment Proposal would tie a borrowers’ monthly payments for their student loan debt to their income and family size, and after a set number of years, any remaining debt is forgiven.
Jim Shenwick, Esq. 212 541 6224 jshenwick@gmail.com
The New York Times has an article that warns about a bankruptcy filing by Bed Bath & Beyond. The article can be found at https://www.nytimes.com/2023/01/05/business/bed-bath-beyond-bankruptcy.html
Landlords and creditors who are owed money by BBB, should take appropriate action prior to a bankruptcy filing by BBB. Landlords and creditors who are owed money by BBB should contact a bankruptcy attorney as soon as possible. Jim Shenwick, Esq jshenwick@gmail.com 212-541-6224
The Sun is reporting that over 100 retail stores will close in 2023. The article can be found at
https://www.the-sun.com/money/7035971/retail-closures-kohls-nordstrom-under-pressure/
Suppliers to these chains should proceed with caution. Jim Shenwick, Esq 212-541-6224 jshenwick@gmail.com
Yahoo is reporting that many FTX creditors are selling their Proof of Claims. The story can be found at https://finance.yahoo.com/news/ftx-customers-reportedly-taking-huge-201238856.html
At Shenwick & Associates, we helping many clients file Proofs of Claim.
Jim Shenwick, Esq jshenwick@gmail.com 212 541 6224
