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Is it Girls or Bankruptcy Judges that have Gone Wild?

Researching everything going on in relation to the bankruptcy series I have been writing can be pretty dry. However, recently on Bankruptcy Law Review, I came across something that is both interesting and revealing at the same time. It seems the company behind Girls Gone Wild (GGW) has been forced into the bankruptcy courts. The Chapter 11 case was filed in the Central District of California bankruptcy courts in Los Angeles.

During the peak of the Auto Bailout, salaried pensioners from Delphi were, as many believe, unlawfully stripped of their pensions. U.S. Bankruptcy Court Judge Robert Drain (Southern District of New York) allowed the Treasurary Department, under the leadership of Secretary Timothy Geithner, to unfairly represent various sides of the case leaving the salaried pensioners virtually unrepresented by counsel.     Read more »

After discovering miscarriages of justice and inconsistent applications of the law when investigating the Delphi bankruptcy and its connection to the auto bailouts, I started noticing something fishy about the Chapter 11 process and bankruptcy courts in the U.S.  The mentality that is rampant in the "U.S. bankruptcy industry" revolves around theories of "foxes guarding hen houses" and the need for speed speed speed justified by the urgency of "melting ice cubes" and "rotting fish". Seriously??

During my investigation series, "A Lawless Presidency", I interviewed Ohio Congressman Mike Turner (R) about the Delphi bankruptcy case. Turner said the "entire process was a miscarriage of justice." After investigating this case further, it is clear why he said that. As you will see below, what happened to the Delphi Salaried Retirees during this bankruptcy process was unfair is unquestionable. But was it a consistent application of the law?

A staple food group icon of an overweight America now becomes an example of what is wrong in our business system and bankruptcy processes. In an announcement last Friday, November 16th, Hostess CEO Gregory Rayburn, said "We deeply regret the necessity of today's decision [to shutdown Hostess' entire business], but we do not have the financial resources to weather an extended nationwide strike."  So how exactly was the money spent after the 2004 restructuring by private equity firm Ripplewood Holdings?  Was it well directed toward rebuilding the company's business?  The decision to force Irving, Texas based Hostess and their entire brand line of products out of business will mean the end of 18,500 jobs and two billion Twinkies.  But who walked away with the dough?

BREAKING NEWS UPDATE:  According to the Houston Business Journal at 2:50 p.m. today, Hostess Brands, Inc. and the BCTGMI Union have entered into a confidential mediation stopping the planned shutdown of the company.   Read more »

While investigating the bankruptcy scandal which, under Obama-appointee Timothy Geithner's influence, stole hard-earned and well-funded pensions from 20,000 auto workers, I stumbled into an underworld of law and questionable processes within our nation's bankruptcy court system.  At the recent National Council of Bankruptcy Judges Conference in San Diego last month, I heard phrases like “melting ice cubes,” “rotting fish,” and “fox guarding the hen house” frequently used among 150 federal judges to rationalize certain bankruptcy court proceedings.  Is this a practice of law?  I was shocked to learn that many bankruptcy judges think that it is fine to go after ordinary shareholders of companies that enter bankruptcy in order to disgorge the value of their investments.  They even had a conference session