San Bernardinom, a small Californian city, is the third city in the state forced to opt for bankruptcy in the last few weeks. This highlights the fact that the economic crisis is not over yet.

The elected officials of the 210,000 people in the city have authorized their city’s attorney to seek federal bankruptcy protection. The city is unable to pay the vendors, although a lot of measures have been taken like selling assets or cutting spending, and opting for bankruptcy has been the only possible solution.

The city is facing a budget shortfall of $45 million. City officials said the problem is weak property and sales tax revenue combined with escalating pensions and a loss of state redevelopment funds.

Stockton, a California city with almost 300,000 people was the first that filed bankruptcy on June 29. The second one was the small city of Mammoth Lakes this July 3.

The California Governor Jerry Brown didn’t want to speculate concerning other possible bankruptcy cases, instead declaring that the real problem is that the country, the states and the cities have lived beyond their means, and he specified that these finances were “means created by a mortgage bubble, by greed, by mistakes, by people not knowing what the hell they were doing, and millions of people have been hurt.”

Jim Spiotto, a Chicago attorney who tracks municipal bankruptcies, said that since Congress added chapter 9 to the bankruptcy code in 1937 to allow municipalities to seek protection, about 640 entities have filed. For Spiotto, bankruptcy is considered a measure of last resort because it carries the danger of increasing the city’s borrowing costs.

Bloomberg explained that in California “five of its 39 Chapter 9 petitions were made by cities or counties: Orange County in 1994, and the cities of Desert Hot Springs in 2001, Vallejo in 2008, and Stockton and Mammoth Lakes in the past month.”

San Bernardino, Stockton and Mammoth Lakes are not the only cases of city bankruptcy around the nation. Cities like   Harrisburg, Pennsylvania, Jefferson County, Alabama, and Central Falls, Rhode Island are on the same situation. For these cities bankruptcy is a great problem. The jobs in the public sector are threatened so a lot of people could loose their jobs, and also some vital services like the police could loose economic support and employees and would  not be able to fulfill their jobs as they did in the past.

The difference between a company and a city bankruptcy is that companies in this situation have the option to break up, cities do not have this option because this would be unconstitutional, so they must find another solution.

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The Council for Responsible College Financing presents Jay Cameron’s stage play, College Fever LIVE! “College Fever! What’s The Real Price of College?” returns April 29, 2012. The play explores the hot topic of college financing in an entertaining theatrical production which includes an incredible light show, live music, poetry, singing and dance.

“College Fever!” was created to bring awareness to the student loan and credit card debt crisis millions of college students are battling. This production offers steps to avoiding and overcoming student debt while illustrating the struggle many families face when confronted with financing college.

Millions of unsuspecting American families fall for the college financing trap that awaits those who want to further their education. According to FinAid.org, as of 2008, “more than $100 billion in federal education loans and $10 billion in private student loans are originated each year.” In 2012, student loan debt has surpassed one trillion dollars in the U.S.

What can conscientious students do? A college education is thought to be required to obtain a better job, but college costs are too expensive for most. Student loan debt seems to be the only way to pay for college and the job market continues to remain inconsistent. And since student loan debt is not subject to bankruptcy, the result of a default can be catastrophic to borrowers, their families and the health of the U.S. economy.

Woven together in an unforgettable yet familiar story, “College Fever!” offers solutions for the student debt crisis in this thought provoking stage-play. As a follow up to “College Fever” Debt Free College Degree – The Seminar digs even deeper to offer a systematic approach to paying for college, debt free. Both events educate and entertain.

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Bankruptcy attorney William Brewer, president of the National Association of Consumer Bankruptcy Attorneys (NACBA), which is the only national organization dedicated to serving the needs of consumer bankruptcy attorneys and protecting the rights of consumer debtors in bankruptcy, issued the following statement:

“The National Association of Consumer Bankruptcy Attorneys has always favored a direct and unflinching examination of the bankruptcy process in America.  We believe in fair play and have no reservations whatsoever about having tough questions posed about the practices of debtors’ attorneys.  It is our view that bankruptcy is simply too important a process in the lives of Americans facing their darkest hours to allow any party – creditors, trustees or consumer legal advocates – to escape scrutiny.

That is why one of NACBA’s board members was a key player in the new study that examines the impact of ethnicity on bankruptcy filings.  We believe that this study is an important start – a much-needed first look – illuminating the path needed for further research.  If the necessary fuller research indicates that there is, indeed, an unfair disparity in how Americans are handled in bankruptcy, NACBA will be the first party in line to propose necessary changes remedy any such imbalance.

In the mean time, we believe it is important to underscore the findings of the researchers that there is no evidence that racism plays any part here.  We can vouch for the fact that bankruptcy attorneys, who deal each year with hundreds of thousands of American families of all races, colors and creeds, are in fact the first-line defenders for Americans who have been unemployed for long periods of time, crushed by crippling health care bills, trapped in the foreclosure crisis, or otherwise fallen on hard times.

Even without the more detailed research needed to resolve this issue, consumer bankruptcy attorneys have no intention of sitting by idly.  NACBA’s Board of Directors will address  this issue at its next and subsequent board meetings, for the purpose of recommending  any needed reforms, guidelines, or attorney practice changes that are warranted.  Additionally, we expect to explore it fully at our next membership meeting in April in San Antonio, TX, where a special panel and full-group discussion will be held.

It also is our intention to reach out to and confer with our many friends in organizations representing Americans of color.  We have spent many long years working closely with these organizations to ensure that bankruptcy is fairer.  They know who we are and what is in our hearts when it comes to fairness and equality for all Americans.

In short, we will simply not rest on this question until we know all the facts and until we have taken every possible step to remedy whatever imbalance may exist.”

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After some intense bankruptcy negotiations, Barnes and Noble has finally secured permission to buy Borders’ customer list for $13.9 million. This purchase includes information from former Borders customers, including email addresses, purchase histories, home addresses, and phone numbers. However, no financial information will be transferred to Barnes and Noble.

Even though the initial sale was made on September 26, the sale was not finalized for several weeks due to Borders’ objection to having their customers’ information sold. The Federal Trade Commission’s consumer chief, David Vladeck, agreed with Borders’ concerns.

“In light of the promises Borders made to its customers, we believe it would be appropriate for Borders to obtain express consent from its customers, specifying the potential purchaser, before it transfers the data. The consent process would allow customers to make their own determination as to whether a transfer of their information would be acceptable to them.

For consumers who did not consent, their data would be purged,” he said. Judge Martin Glenn, who has been presiding over Borders’ bankruptcy proceedings, decided it would not be necessary for customers to express permission for their information to be transferred to the new company.

Instead, Barnes and Noble was required to provide former Borders’ customers with the ability to opt out, and have their personal information purged from all databases. Last week, Barnes and Noble CEO, William Lynch, sent an email to 40 million former Borders customers welcoming them to the “Barnes and Noble family.”

The email briefly explained the purchase, and encouraged recipients to take advantage of the opportunity to receive emails with special offers for in-store and online purchases at Barnes and Noble. There was also a note at the bottom of the page with a link giving customers the option to opt out and have their information deleted.

Customers who received this email will have until October 15 to opt out. Former Borders customers who did not provide an email address will have until October 29. After these dates have passed, anyone who has not specifically opted out will automatically have their information transferred to the Barnes and Noble database.

This sale has caused some controversy concerning a company’s right to sell the intellectual property of their customers to another company without express permission. The privacy rights of an individual are highly prized in American society, and Barnes and Noble’s ability to simply buy personal information is upsetting to some individuals.

Senator Richard Blumenthal of Connecticut, recently stated his objections. “The settlement reached between Borders and Barnes and Noble is wholly inadequate and unacceptable. Consumers are unprotected unless they explicitly opt out. Instead, their specific consent should be requested,” he said.

The bankruptcy courts have set a precedent for companies to sell their customers’ information to others in the future. Only time will tell if this sharing of information is determined to be a breach of privacy, or simply a new way for businesses to reach out to customers.

Image Courtesy of   http://www.flickr.com/photos/benjamingolub/

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After struggling to survive Chapter 11 bankruptcy since February, Borders officially announced they would be closing the doors on their remaining 399 stores by September.

At the height of their success in the early 90s, they had more than 1,500 stores across the country. Despite competition with Barnes and Noble, Borders was a successful bookstore giant. Then as electronic E-readers and online publications grew in popularity, Borders began to have problems.

A number of their stores began to close as they fell behind in popularity. In 2010 they teamed up with the company that owns the Kobo E-reader and started selling it in their stores in an attempt to stay afloat. But it was still not as popular as other similar products, such as Barnes and Noble’s Nook or Amazon.com’s Kindle.

Finally, in February of this year, Borders declared Chapter 11 bankruptcy and put their remaining stores up for sale in an attempt to keep the franchise alive. They did receive an offer from the owner of the Book of the Month Club, a book club that offers its members discounts on popular books, but the creditors for their bankruptcy refused the terms of the sale because they would not have received compensation for Borders’ liquidation.

That decision has led to the selling of Borders’ remaining assets. All of the remaining stores are having going out of business sales from now until September. Many of the coffee shops located within Borders have already closed up shop, leaving an ominous dark corner of the store that stands as reminder to any customer who wants to snatch up a few good deals that the store will soon be closed.

Borders currently has almost 10,700 employees, all of whom will soon be out of work. In addition, a number of companies had departments that worked primarily or exclusively with Borders, and those positions will be lost as well.

In America’s struggling economy, an employment loss of this size is unfortunate. Many people are upset about Borders’ closing, but independently owned book stores have mixed feelings. While their closing will give customers less options and make them more likely to shop in their stores, it does not guarantee that former Borders customers won’t simply make the switch to online purchasing instead.

As Borders begins to slowly die, interest turns to their main competition, Barnes and Noble. Brick and mortar book stores in general have lost business in recent years, and people are wondering if Barnes and Noble will be next. However, it seems that Barnes and Noble will survive the current transition from brick and mortar sites to online buying and reading E-books.

They have managed to continue turning a profit, which Borders hasn’t been able to do since 2006, by expanding beyond the physical store. Last Christmas, Barnes and Noble managed to earn 30 percent of online book sales, and their Nook E-reader is fairly popular.

Borders was an icon for many years and many of their loyal customers are sad to see them go. The closing of their doors signals a significant shift in the way people are both buying and reading their books. Perhaps 20 years from now the idea of going to a store to buy a book will seem just as strange as getting milk from the milkman.

Image Courtesy of  http://www.flickr.com/photos/boydsworld/

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Early this year Australia’s largest bookstores, Angus& Robertson and Borders, announced they were near bankruptcy and were placed into voluntary administration.

The two large book chains are, along with Whitcoulls, owned by the organization REDgroup.

Since the voluntary administration has taken over gift vouchers have been suspended for all stores and more then many of their people face unemployment.

At the time of being placed into administration there were 260 Borders, Angus & Robertson and Whitcoulls stores across Australia, New Zealand and Singapore.

REDgroup is more then $115 million in debt and has been struggling against the increasing competition from large internet bookstores and a general downturn in retail profits since the global financial crisis.

The administration also closed of 37 Angus & Robertson stores and one Borders, resulting in the loss of jobs for 321 full and part time workers.

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