Blogs

Pinnacle, a regional airline serving northwest Alabama, has filed for bankruptcy protection in the face of increasingly high debt. The company has been forced to admit that its business model, in which it provided regional and commuter service to the newly-merged United and Continental airlines, plus US Airways and Delta, had become “unsustainable.” In its bankruptcy filing, Pinnacle listed $1.42 billion in debt, compared to $1.54 billion in assets.

The airline will end its agreements with United/Continental and US Airways, but retain its relationship with Delta.

Real estate services firm Grubb & Ellis Co. has filed for bankruptcy protection. Most of the company’s assets will be sold to BGC Partners Inc.

Perhaps unsurprisingly, the company pointed to the decline in housing markets that began in 2007 as a major source of its financial troubles. The strain placed upon the company’s money supply was so heavy that it became difficult to continue normal operations. The company tried to find a buyer before declaring bankruptcy, but no such buyer was found, leading to the Chapter 11 filing.

Jefferson County’s bankruptcy case, the largest such municipal bankruptcy in U.S. history, has attracted national attention. County authorities are hard-pressed to provide even basic services, such as affordable water and sewer service; according to BBC report, the county’s poorest can no longer afford to keep the water turned on. The New York Times reports that, in a decision rendered in January, federal bankruptcy judge Thomas B.

According to a Reuters report, the bond insurers involved in the record-setting Jefferson County bankruptcy case found themselves in dire straights as a result of the county’s shrinking payments on its $3.14 billion debt. Syncora Guarantee Inc. was forced to file a motion to temporarily increase the county’s payments. The company believed that “its very viability as a going concern may be threatened” by the situation, according to its lawyers.

Scottish soccer team Rangers F. C. sought bankruptcy protection last week over a tax dispute involving 9 million pounds, or approximately $14 million. Additionally, a tax tribunal has yet to issue a ruling on further liabilities of up to 75 million pounds ($117 million).

The Alabama state legislature’s 2012 session begins on Tuesday. The Jefferson County crisis, and particularly the ongoing struggle to create a plan to operate the sewer system, will be arguably the most urgent--and most intractable--problem lawmakers will address. A statement released by the Alabama State Bar, however, raises another important issue: the lack of funding for the state’s court system, which has disrupted crucial public services.

The 2012 regular session of the Alabama Legislature will begin on Tuesday, but there is still little agreement on a solution to the financial problems posed by Jefferson County’s record-breaking bankruptcy. The county will not be able to exit bankruptcy until it demonstrates the ability to manage its own operations and meet its fiscal obligations.

The Wall Street Journal reports that the first round of bidding for the bankrupt Los Angeles Dodgers has been completed. The club’s financial advisers approved around 10 of the bids. A second round of bidding will now take place among those 10 bidders.

The consequences of the bankruptcy case of Jefferson County, the largest such case in U. S. history, have extended well beyond Alabama’s borders. A judge has ordered Jim Crane, now owner of Major League Baseball’s Houston Astros, to furnish the court with certain details of his settlement with J. P. Morgan Chase.

John S. Young, the court-appointed receiver once tasked with administering Jefferson County’s sewer system on behalf of bondholders, is no longer accruing billable hours. County Commissioner Jimmie Stephens and W. Patton Hahn, Young’s lawyer, both confirmed that Young is effectively no longer on the county’s payroll.