Business and Tax Lawyer Blog

Bank of America has agreed to a $20 million settlement for wrongfully foreclosing on 160 service members without checking on their military status. The suit was filed by the U.S. Department of Justice against BAC Home Loans Servicing, formerly Countrywide Home Loans Servicing. Allegedly, the lender did not consistently check the active duty status of borrowers on whom it foreclosed. The Justice Department asserts that Countrywide knew, or should have known, about their military status prior to initiating foreclosure proceedings. The Servicemembers Civil Relief Act was implemented by Congress in order to protect military personnel from civil requirements, such as mortgage payments, pending trials, outstanding credit-card debt and taxes.

To learn more about this article, visit BofA unit to pay $20M settlement.

Continue reading "Bank of America to Pay $20 million for Wrongfully Foreclosing on Active Duty Military Personnel " »

Since Blockbuster Video filed bankruptcy back in September, its stock price has fluctuated from 4 cents to 23 cents, yet some investors are undeterred and still purchasing those shares.
This is not a new investment strategy; for years investors have bought stock in bankrupt companies with the hope there will be money remaining once all the company's creditors are repaid.
Some investment analysts view this as very risky, given that when a company files Chapter 11 restructuring, shareholders are the last to be paid. Therefore, unless the creditors are fully satisfied, shareholders will receive nothing.
In 2009 and 2010, only 4 out of 41 public companies delivered returns to shareholders after emerging from bankruptcy.

To learn more about this article, visit Why People Buy Stock in Bankrupt Companies.

Continue reading "Is Buying Stock in a Bankrupt Company Worth the Risk? " »

In the event of a government shut-down, Navy Federal Credit Union (NFCU) says it will cover April 15 payroll for all active-duty military who have direct deposit accounts with the bank. Through this action, NFCU is ensuring active-duty members will not see an unexpected decrease in their mid-month deposits. Other steps NFCU is taking include expedited approvals for loans and credit extensions, as well as overdraft protection and credit card limit increases/decreases.

As of Friday afternoon, Congress had yet to reach an agreement on a budget measure in order to avoid a federal government shutdown.

Navy Federal Credit Union has eight branches in Northeast Florida with 155,000 area members and $924.8 million in area deposits.

To read more on this article, visit Navy Federal Credit Union Prepares for Possible Government Shutdown.

Continue reading "Navy Federal Braces for Probable Government Shutdown" »

If you have ever been in an airport or mall, then you've most likely seen a Sbarro pizza kiosk. The Wall Street Journal has reported that the pizza chain is filing for Chapter 11 bankruptcy protection.
The New York based pizzeria cites a decline in mall traffic, less consumer spending, and rising costs of ingredients for its current financial woes.
According to Sbarro's Chapter 11 Petition, it has an asset-to-debt ratio of $471B to $486.6B, respectively.
Sbarro currently operates more than 1,000 restaurants in over 40 countries.

You Can Read More by Visiting Sbarro files for Chapter 11.

Continue reading "Pizza Chain, Sbarro, Files for Chapter 11 Bankruptcy" »

Powerhouse credit card companies like Visa and Mastercard are declining transactions associated with Wikileaks - specifically, refusing to process donations to the organization. Wikileaks has been under investigation for allegedly releasing privacy information and its founder is in British custody for an assortment of legal concerns. Wikileaks' payment processor is now suing those companies that are refusing to complete donation transactions with Wikileaks alleging this practice is crippling the business.

However, while no specific information has been released by the credit card companies regarding the money frozen in Wikileaks' accounts, they appear to be undertaking due diligence to ensure that the transactions are legal. American credit card companies have come under extreme scrutiny for not doing due diligence in the past. Maybe this is a sign that they have learned their lesson from making questionable business decisions in the past and are recognizing a need to take preventative acts to avoid federal fines and penalties. U.S. companies do not wish to appear to be financially contributing to any company that is allegedly leaking private customer information.

To read more about this story, please visit WikiLeaks' payment processor to sue card companies.

Continue reading "Major American Credit Card Companies Getting Sued by Wikileaks' Processor " »

This will be a continuation of a 5 part series on what creditors can and cannnot do in collecting debts. Federal and Florida law provide protection from overagressive creditors. Again, Florida law practically imitates Federal law in this regard.

Q: What remedies are available to me if a creditor violates Florida law in trying to collect a debt?

A: Florida Statute 559.77 provides that any person whose rights have been violated by a creditor may bring a civil action for actual and statutory damages up to $1,000 together with court costs and attorneys fees. If actual damages are hard to determine, a court will look to enforce liquidated damages.

Q: As a violated debtor, is it correct that all I have to prove is that the creditor contacted me about a debt?

A: No. You must also show that the creditor's conduct was willful or intentional. A bona fide or good faith error by the creditor is a valid defense to a claim under Florida Consumer Collection Practices Act

Continue reading "Creditor Rights and Obligations Part 5 - Limits on Creditors" »

This will be a continuation of a 5 part series on what creditors can and cannnot do in collecting debts. Federal and Florida law provide protection from overagressive creditors. Again, Florida law practically imitates Federal law in this regard.

Q: If a debtor requests the information about the creditor or any other entity connected to the debt, must the creditor disclose this information?

A: Yes. Florida Statute 559.72(15) requests that creditors release such information.

Q: At what hours of the day can a creditor contact me?

A: Creditors cannot communicate with the debtor between the hours of 8 a.m. and 9 p.m. of the debtor's timezone. Florida Statute 559.72(17)

Continue reading "Creditor Rights and Obligations Part 4 - Limits on Creditors" »

This will be a continuation of a 5 part series on what creditors can and cannot do in collecting debts. Federal and Florida law provide protection to debtors from overagressive creditors. Again, Florida law practically imitates Federal law in this regard.

Q: Can a creditor use profane, obscene, or vulgar language against a debtor or a family member in trying to collect a debt?

A: No. Florida Statute 559.72(8) prohibits this behavior.

Q: Can a creditor get court costs and attorneys fees if a debtor loses his action?

A: Yes. Some courts have awarded attorneys fees against the debtor.

Q: Can a creditor threaten to enforce a debt when the person knows the debt is not legitimate or assert some other legal right that the person knows does not exist?

A: No. Florida Statute 559.72(9) prohibits this action.

Q: Can a creditor have my wages garnished?

A: Yes, in some instances. The creditor must get a valid court order and inform the employer of such order.

Q: Can a creditor communicate with the debtor under the "guise" of an attorney? (Letterhead or oral communication)

A: No of course not. Florida Statute 559.72(11)-(12) prohibits this type of behavior.

Continue reading "Creditor Rights and Obligations Part 3 - Limits on Creditors" »

In trying to collect a debt owed, creditors have rights and remedies in enforcing debt agreements against their debtors. Sometimes they can garnish wages, obtain liens on property, reposess items pledged as collateral or even file civil suit for monetary damages. However, there are actions creditors cannot take that are prohibited by federal and Florida law. In Florida, the Florida Consumer Collection Practices Act protects debtors from certain creditor actions. The federal law can be found in the Fair Debt Collections Act (FCPA) and Florida law practically imitates the FDCA. The federal laws can be found at Fair Debt Collections Act.

Florida laws can be found at Florida Consumer Collection Practices Act.

Q: Can a creditor simulate or pretend to work for law enforcement or any other governmental agency in collecting the debt?

A: No. Florida Statute 559.72(1) prohibits such an action.

Q: Can a creditor threaten or use force in collecting a debt?

A: No. Florida Statute 559.72(2) prohibits such an action.

Q: Can a creditor repossess property of mine without my knowledge?

A: Yes. If you agreed to pledge property as collateral, the creditor may repossess the property if the debtor is in default of the loan. However, the creditor must repossess the property in a way that does not breach the peace.

Continue reading "Creditor Rights and Obligations Part 1- Limits on Creditors" »

When a creditor "oversteps" boundaries in collecting a debt, what is the debtor's potential for recovery?

Florida statute 559.77 provides that if a plaintiff can show a creditor's harassment or abuse was wanton, malicious or gross and outrageous, then punitive damages may be available. "Punitive damages" are damages that seek to punish the defendant for misconduct and, in theory, deter others from engaging in similar conduct. If the creditor's conduct is not malicious or willful, then damages will probably be minimal unless you can prove actual damages. Some Florida courts have inserted "liquidated damages" where actual damages were too difficult to determine or non-existent. These types of damages are small, and unless established by contract, must be litigated upon.

Attorney's fees are normally awarded to the prevailing party in these types of actions, but are still left to the discretion of the court. Courts that have jurisidiction over these types of claims are (1) the county where the defendant resides or has its principal place of business or (2) the county where the harassment occurred.

Applicable federal laws can be found at Fair Debt Collections Act, and Florida laws can be found at Florida Consumer Collection Practices Act.

Continue reading "What happens when Creditors "overstep" boundaries in collecting Debts?" »

The Sawgrass Marriott Golf Resort and Spa was purchased in 2006 for $220 million with financing from Goldman Sachs Commercial Mortgage Co. Revenue for the luxury property fell from nearly $60 million in 2008 to just over $40 million in 2009. Even though the resort continued to operate profitably in 2009, the drop in revenues caused the owners to lose liquidity and seek debt restructuring.

In October 2009, Goldman Sachs said that it would stop negotiating debt restructuring and foreclose on the property. That has forced the Ponte Vedra Beach, Florida resort to file for Chapter 11 bankruptcy. While resort management has said that they plan to continue normal operations, the two Irish investment partnerships that own the hotel filed bankruptcy petitions with the US Bankruptcy Court in Jacksonville, Florida. According to court records, the resort hopes to continue operating profitably even while in bankruptcy proceedings.

The large resort facility features over 400 guest rooms, six restaurants and offers hotel guests access to the courses at the PGA TOUR’s nearby Tournament Players Club at Sawgrass. The resort employs 435 people, and according to a Marriott spokesperson, the proceedings will not affect any employment issues. A PGA TOUR official added that the bankruptcy will have no bearing on the PGA TOUR’s Tournament Players Club at Sawgrass, which is owned and managed by a subsidiary of the PGA TOUR.

Find out more about this story at Lender’s foreclosure proceedings forced Sawgrass Marriott into Chapter 11.

If you live in the Jacksonville, Florida or Orlando, Florida area and have a business legal matter, please contact Wood, Atter & Wolf, P.A. for business legal counsel.

Florida's Task Force on Residential Mortgage Foreclosure Cases was established to help the state of Florida respond to the foreclosure crisis that has hit the state in the latest recession. The fifteen member task force made its final report and recommendations to the Florida state supreme court in August of 2009. In light of the task force's findings, the court has issued an administrative order to enact the recommendations.

One of the key elements of the order is a provision for creating a statewide foreclosure mediation program. Under the order, any foreclosure on a residential homestead property with a loan that originated under federal truth in lending regulations will be required to go into mediation unless both parties agree otherwise.

The goal of the order is to encourage parties to mediate outside of the courts, which should ease the burden on the already strained court system. At issue is whether there are enough professionally trained mediators to hear all of the suits and whether the new requirements would cause the already slow foreclosure process to a come to a virtual standstill.

You can read more about the Florida foreclosure crisis and the supreme court's response to it at Florida Supreme Court Orders Mediation in Foreclosure Cases!

If you need an attorney to assist you in defending your rights, please contact Wood, Atter & Wolf, P.A. for legal counsel.