Misery Index: Week of November 6, 2017

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PacerMonitor’s look back at this week’s most compelling bankruptcies

Sex Harassment Suits Add to Cost for Yoga Chain  Bikram Inc. and affiliates Bikram Choudhury Yoga Inc. and Bikram’s Yoga College of India LP sought protection from up to $50 million in liabilities in the Central District of California – Los Angeles Division. The chapter 11 petition was signed by CEO A. John A. Bryan Jr. Among unsecured claims, the operator of a chain of yoga studios lists more than $16 million in disputed legal judgments following a string of sexual-misconduct allegations against its founder, Bikram Choudhury, who has denied any wrongdoing in connection with the claims, according to news reports.

Space Tourism Company Crash Lands in Bankruptcy XCOR Aerospace Inc. sought protection from up to $50 million in liabilities, with Chairman Charles T. Burbage signing off on a chapter 11 petition. According to news reports, the debtor was unable to line up investors or partners before it ran out of money. Former CEO Jay Gibson had been selling 40-minute rides into outer space on the company’s Lynx spacecraft. President Donald J. Trump announced his intention in June to nominate Mr. Gibson to act as deputy chief management officer of the Department of Defense.

Texas Electricity Giant Says Wind Power Helped Blow It Into Bankruptcy Due to the downturn in the energy sector, ExGen Texas Power LLC and six affiliates sought a safe haven from up to $1 billion in liabilities in the District of Delaware. The chapter 11 petition was signed by Chief Restructuring Officer David Rush, who partly blamed public policy initiatives and incentives that place downward pressure on wholesale power prices by promoting the development of wind capacity.

Read the declaration of Mr. Rush here.

$76 Million Judgment Leads Construction Business to Financial Ruin Doing business as Navillus Contracting, Navillus Tile Inc. and affiliate Advanced Contracting Solutions sought protection from up to $500 million in liabilities in the Southern District of New York. The chapter 11 petition was signed by CEO Donal O’Sullivan, whose company was accused of creating a bogus business to avoid union wages and union benefit payments, according to news reports. In an affidavit, Mr. O’Sullivan said he could not afford to continue business operations and pay the judgment.

Read Trustees of the New York City District Council of Carpenters Pension Fund, Welfare Fund, Annuity Fund,l Apprenticeship, Journeyman Retraining, Educational and Industry Fund et al v. Navillus Contracting here.

Competitive Retail Environment Leads Teen Fashion Stores Into Bankruptcy Styles for Less sought protection from up to $50 million in liabilities in the Central District of California. The chapter 11 petition was signed by CFO August DeAngelo, who blamed the debtor’s bankruptcy on increased industry discounting, online penetration and shifts in consumer spending away from fast fashion and toward services and experiences. “The result has placed severe pressure on the Debtor’s cash flow, depriving the Debtor of the ability to timely pay obligations to its Landlords and vendors, resulting in lawsuits and numerous threats from creditors,” Mr. DeAngelo wrote in his declaration to the Court.

Uber and Temporary Restraining Order Blamed for Demise of New York Cab Service  Woodside Management Inc. sought protection in the Southern District of New York from up to $50 million in liabilities. The chapter 11 petition was signed by managing member Evgeny A. Freidman, who was arrested on charges of stealing more than $5 million that should have been paid to the state of New York, according to news reports. Mr. Freidman partly blames the rise of Uber and a temporary restraining order filed by a group of drivers that has stripped the debtor of its ability to operate and generate revenue.

Read Mr. Freidman’s affidavit here.

Read Woodside’s adversary complaint against drivers here

Dispute Over Janitorial Services Leads Family Owned Office Complex to Fail Alamo Towers – Cotter, LLC sought protection from up to $50 million in liabilities in the Western District of Texas in San Antonio after losing an appeal over janitorial services. The chapter 11 petition was signed by Marcus P. Rogers

Debts Add Up to Chapter 11 for Florida Tax and Bookkeeping Firm Ingersoll Financial LLC sought protection from up to $10 million in liabilities in the Middle District of Florida. The chapter 11 petition was signed by Keith Ingersoll. Creditors include Alexandra Krot who sold five houses to Southwest Housing LLC, which is managed by Mr. Ingersoll, according to news reports.

Demise of This Colorado Bank Is Its Own Loans Colorado National Bancorp sought protection from up to $10 million in liabilities, of which $1,078,829.93 is owed to Compass Island Investment Opportunities for a loan. Filed in the District of Colorado, the chapter 11 petition was signed by CEO Scott D. Jackson and lists 20 creditors who made loans to the debtor.

Bank Lawsuit Sinks Louisiana Vessel M/V Jack Fitz LLC sought protection from up to $10 million in liabilities, of which $1,532,659.79 is owed to United Community Bank, which sued the debtor on Nov. 6. The chapter 11 petition was filed in the Eastern District of Louisiana and signed by authorized member Josh Jambon, a businessman who was sentenced to 25 weeks in jail in 2014 for attacking FEMA workers, according to media reports.

Read the United Community Bank lawsuit here.

Medical Practice Owned by Kansas Physician Falls Financially Ill Kansas City Internal Medicine PA sought protection from up to $10 million in liabilities of which $1,415,411.70 is owed to medical supplier McKesson Corp. The chapter 11 petition was signed by Dr. David Wilt, an internist, and filed in the District of Kansas.

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