Relativity Media Files for Chapter 11 Bankruptcy

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Yesterday, July 30, 2015, Relativity Media, the struggling “mini major” Hollywood studio, filed for Chapter 11 Bankruptcy protection in the United States Bankruptcy Court for the Southern District of New York. The filing will allow the Beverly Hills, California based studio, led by its founder, chairman and CEO Ryan Kavanaugh, to continue to operate while restructuring. According to bankruptcy documents, the company, along with 144 subsidiaries and holding companies that also filed petitions, owes about $681 million to secured creditors, but only claims assets between$100 million and $500 million.

Founded in 2004, the company amassed its fortunes by co-financing high-profile movies developed by major studios Universal Pictures and Sony Pictures Entertainment, like “The Fast and the Furious: Tokyo Drift,” “Evan Almighty,” “Talladega Nights: The Ballad of Ricky Bobby,” “Ghost Rider,” “Hancock,” “Fast & Furious 6” and “21 Jump Street,” among many others. Relativity Media stumbled trying to produce and distribute hits of its own and had a slew of misses, including “Machine Gun Preacher,” “Paranoia,” “Desert Dancer,” “Oculus,” and “Don Jon.”

As it prepared for the expected bankruptcy filing, Relativity on Wednesday sent layoff notices to 75 of its 350 employees. “Regrettably, as a result of the need to reduce costs, we have had to make some difficult staffing decisions,” Mr. Kavanaugh said in a statement on Thursday. Mr. Kavanaugh also stated that he believes the bankruptcy filing “will protect our valuable franchise and allow us to emerge as a stronger, more focused company.”

In order to conduct ongoing operations, Relativity is pursuing $45 million in interim financing, known as a debtor-in-possession loan, also known as a D.I.P. loan, to help pay for the ongoing Chapter 11 process.

New York Taxi King Puts Some Companies Into Bankruptcy

The move by Gene Freidman is aimed at stopping Citibank from seizing valuable taxi medallions.

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New York taxi mogul Evgeny “Gene” Freidman put several of his cab companies into bankruptcy protection on Wednesday in a move to stop its ex-lender, Citibank, N.A., from seizing the licenses to operate 46 taxis in the city.

The bankruptcy filing blocks the bank’s efforts to collect some $34 million in unpaid loans from Mr. Freidman’s companies, escalating a dispute that came after Citibank said it would cut off some of his companies in December 2014.

In documents filed in U.S. Bankruptcy Court in Brooklyn, Mr. Freidman said that Citibank officials betrayed him for Uber Technologies Inc. Last month, The Wall Street Journal reported that Uber Technologies Inc. is completing a $2 billion credit line—a deal that involves Citibank’s parent and may signal that Uber is preparing to become publicly traded.

A Citibank spokesman said its seizure efforts followed Mr. Freidman’s “failure to agree to terms to settle his outstanding obligations.”

The taxi companies in bankruptcy own 46 vehicles. Each one possesses a medallion issued by the New York City Taxi and Limousine Commission that gives drivers of each vehicle the power to pick up street hails, including in Manhattan’s central business district, and carry fare-paying passengers.

Each medallion is worth roughly $950,000, according to transportation lawyer Matthew W. Daus whose expertise was cited a state court lawsuit filed by Citibank against Mr. Freidman in March.

A judge recently decided that Citibank may seize the company’s medallions unless Mr. Freidman posts a $50 million bond. In court papers, Mr. Freidman said that if Citibank sold the medallions at depressed prices, it “would likely cause a massive devaluation of all [New York City] medallions, resulting in more defaults by other taxi operators and perhaps cause a collapse of the entire industry.”

“The only beneficiary of such a devastating result would be Uber and the institutions it does business with,” Mr. Freidman said in court papers.

The bankruptcy filing bars Citibank from taking the medallions, giving Mr. Freidman time to meet with two potential lenders. Lending money to taxi cab companies that possess medallions has historically been a safe investment, though that market has recently tightened as major lenders worry how new competitors will affect the taxi business model, he said in Wednesday’s court filing.

Aside from his dispute with Citibank, Mr. Freidman’s companies have come under scrutiny for its labor practices. In April, New York state Attorney General Eric Schneiderman sued Mr. Freidman and four companies with accusations that they broke the terms of a December 2013 settlement involving driver pay and health-care benefits.

Mr. Freidman’s lawyers denied wrongdoing and characterized the lawsuit as “an attempt to collect impermissible penalties,” according to court papers.

A judge recently decided that Citibank may seize the company’s medallions unless Mr. Freidman posts a $50 million bond. In court papers, Mr. Freidman said that if Citibank sold the medallions at depressed prices, it “would likely cause a massive devaluation of all [New York City] medallions, resulting in more defaults by other taxi operators and perhaps cause a collapse of the entire industry.”

“The only beneficiary of such a devastating result would be Uber and the institutions it does business with,” Mr. Freidman said in court papers.

The bankruptcy filing bars Citibank from taking the medallions, giving Mr. Freidman time to meet with two potential lenders. Lending money to taxi cab companies that possess medallions has historically been a safe investment, though that market has recently tightened as major lenders worry how new competitors will affect the taxi business model, he said in Wednesday’s court filing.

Aside from his dispute with Citibank, Mr. Freidman’s companies have come under scrutiny for its labor practices. In April, New York state Attorney General Eric Schneiderman sued Mr. Freidman and four companies with accusations that they broke the terms of a December 2013 settlement involving driver pay and health-care benefits.

Mr. Freidman’s lawyers denied wrongdoing and characterized the lawsuit as “an attempt to collect impermissible penalties,” according to court papers.

By Katy Stech of The Wall Street Journal

http://www.wsj.com/articles/new-york-taxi-king-puts-some-companies-into-bankruptcy-1437600484

Sabine Oil & Gas Corporation Files for Bankruptcy

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Earlier today, July 15, 2015, Sabine Oil & Gas Corporation filed for Chapter 11 Bankruptcy protection in the U.S. Bankruptcy Court for the Southern District of New York. The exploration and production company is the latest to become affected by the decline in global oil prices, joining American Eagle Energy Corp., Dune Energy Inc. and Quicksilver Resources Inc. in bankruptcy this year. Sabine Oil has tried everything to cope with the decline in energy prices, including selling assets, cutting expenses for drilling and new wells, and even going as far as to freeze wages, but it still wasn’t enough. According to papers filed in court, the company had about $2.5 billion in assets and $2.9 billion in liabilities as of May 31.

Sabine Oil said in a statement that it’s discussing a consensual financial restructuring plan with lenders and debtholders. In the meantime, the company expects to support itself with its cash on hand and funds generated from ongoing operations.

When Buying in Bulk Is a Big Waste of Money

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Personal finance experts frequently tell shoppers to save money on food by buying in bulk, watching out for sales and cooking food at home. But according to a new study in the International Journal of Consumer Studies, those tactics could cause you to spend more money in the long run by encouraging you to buy more food than you’ll eat.

“Surprisingly, findings show that strategies used to save money — such as buying groceries in bulk, monthly shopping trips, preference for supermarkets and cooking from scratch — actually end up generating more food waste,” wrote Gustavo Porpino, Juracy Parente, Brian Wansink and John S. Dyson in the report. “This mitigates the savings made during the purchasing phase.”

Too often people buy more food than they can eat — especially when they buy in bulk — and then throw it out once it’s past its expiration date. People also tend to stock up on unnecessary items just because they’re on sale, the study authors found after following the shopping habits of 14 lower-middle income families in Brazil. “Families reported that some foods were not consumed because they were bought in abundance and past their expiration dates, or because they had forgotten to prepare it,” wrote the authors. “These products are usually the ones more prone to be bought on impulse, such as powder for preparing gelatin, cake mix, sauces and canned food.”

The authors also found that people frequently waste money by cooking more food than their family can eat, storing food improperly and, in some cases, refusing to eat leftovers. They also tend to buy what they think they need based on memory rather than a shopping list and overspend as a result. “Despite income constraints, the families studied tended not to plan grocery shopping and in several cases the amount of food they purchased seemed to be greater than they needed,” wrote the authors.

A separate study published June 10 in the open-access journal PLOS One also found that people frequently underestimate how much food they waste. According to a survey of more than 1,000 U.S. consumers, 56 percent of consumers claim to throw out less than 10 percent of the food they buy, while 13 percent insist they never throw out food. Meanwhile, 73 percent believe they waste less than the average American household and a majority say they regularly take steps to reduce their waste.

For example, more than half of respondents to the survey claim to regularly check their pantries, estimate what they need and draw up a list before they shop. And yet, research shows that an estimated 31 to 41 percent of food in the U.S. is wasted. More than two-thirds of consumers also insist that they rarely buy too much food because of sales or tempting packaging.

“Based on what is known about wasted food in the U.S., it is clear that respondents as a group are substantially underreporting their waste levels, and they may also be overreporting their effort levels,” wrote study authors Roni A. Neff, Marie L. Spiker and Patricia L. Truant in the report.

How to Reduce Your Waste
The good news is that you can take steps to reduce the amount of food you waste — and still save money by clipping coupons, cooking at home, scanning sales and buying food in bulk.

The key is to spend more time planning your meals, sticking to a shopping list and keeping a close eye on what you bought. If you find an item on sale, make sure you have a plan for how you’ll use it — and don’t buy bigger packages if you don’t think you can swiftly use them up.

Rather than buy a whole lot once or twice a month, you may also want to visit the store more frequently and buy only what you’ll cook that week.

If you spot a sale for more produce or meat than you can quickly use, go ahead and freeze it. Separating the meat and packaging it individually can also help reduce waste by ensuring that you only cook what you’ll eat that week.

“Fortunately, most of the factors that lead to food waste can be easily remedied by simple changes in food buying, preparing and storing,” noted researcher Gustavo Porpino in a news release.

By Kelly Dilworth of CreditCards.com

http://time.com/money/3922733/bulk-shopping-food-waste-study/