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Written by: Robert DeMarco
There are countless websites that state, rather unabashedly, that Walt Disney filed for bankruptcy. That is simply not the case. See disney.wikia.com; wikipedia.org. Unfortunately, too many people regard the internet as gospel. While Walt Disney never filed for bankruptcy, a business enterprise that he and several associates formed in Kansas City was placed into bankruptcy.
Walter Disney, William Lyon, Fletcher Hammond, W.F. Hammond and Edmund Wolf formed Laugh-O-Gram Films, Inc., a Missouri corporation, in May, 1922 [“Laugh-O-Gram”]. Laugh-O-Gram was created to develop short animated films that would be distributed to movie theaters to run before the main feature. Unfortunately, Laugh-O-Gram was undercapitalized from the beginning. The Articles of Association on file with the Missouri Secretary of State reflect that Laugh-O-Gram was initially capitalized with $2,700.00 in cash and $5,000.00 in personal property.
On September 16, 1922, Laugh-O-Gram entered into a contract with Pictorial Clubs, Inc., a Tennessee corporation [“Pictorial”]. Pictorial agreed to pay $11,100.00 for the right to distribute six black and white silent animated shorts (commonly referred to as “laugh-o-grams”) for distribution to schools and other non-theatrical venues. Walt Before Mickey: Disney’s Early Years, 1919-1928, Timothy S. Susanin (University Press of Mississippi, 2011). Unfortunately for Laugh-O-Gram, the Pictorial contract allowed Pictorial to receive the rights to all six “laugh-o-grams” for a down payment of $100.00, the remaining balance due on January 1, 1924. Id.
Throughout 1923, Laugh-O-Gram continued to face a variety of financial challenges. As a result, on October 4, 1923, at 4:55 p.m., Ubbe Iwwerks “[Iwwerks”], one of the Laugh-O-Gram animators and a close friend of Walt Disney, filed a Creditor’s Petition forcing Laugh-O-Gram into bankruptcy. Two days later, Iwwerks requested the appointment of a bankruptcy Receiver. The First Meeting of Creditors was calendared for October 30, 1923. The bankruptcy schedules [“Bankruptcy Schedules”] were subsequently filed on November 13, 1923, by certain petitioning creditors on behalf of Laugh-O-Gram.
The Bankruptcy Schedules reflect secured claims of $501.65 due and owing to Fred Schmeltz, unsecured claims in the aggregate sum of $12,325.23, and assets totaling $6,586.62 exclusive of any claims against Pictorial. As reflected in the Petition for Receiver filed by Iwwerks, it was his opinion that “its only asset consists of a contract and contract rights with one Pictorial Clubs, Inc.; that the moneys due from said Pictorial Clubs, Inc., to the bankrupt under said contract are being or will shortly be received and paid out to certain creditors whom the bankrupt has attempted to secure by an assignment of said contract and contract rights, and that the proceeds of said contract will thus be dissipated and expended to the injury and prejudice of other of the bankrupt’s creditors….”
It was Iwwerk’s fear that a chattel mortgage entered into by and between Laugh-O-Gram and Fred Schmetlz [“Schmeltz”] would bar any dividend being paid to the unsecured creditors because of his claim of lien upon the Pictorial contract. Iwwerk’s fear was shared by the Bankruptcy Referee and a Receiver was appointed.
As can be imagined, the Bankruptcy Referee faced a number of obstacles in trying to collect on the Pictorial obligation. In January of 1924, the Receiver learned that there existed not only Pictorial, but also Pictorial Clubs, Inc., a New York corporation [“Pictorial NY”]. Unfortunately, Pictorial was also insolvent and sold all of its assets to Pictorial NY.
The Receiver and Pictorial NY spent much of January negotiating a resolution to the situation involving the laugh-o-grams. On January 26, 1924, the Receiver filed an Application for Authority to Enter Into Contract with Pictorial NY. The contract referenced in the Application memorialized the terms of the settlement by and between Pictorial NY and the Receiver.
This, however, was only half of a solution. As stated supra, Schmeltz asserted the Pictorial contract secured his claims against the Bankrupt. On August 15, 1924, Schmeltz filed an Intervening Petition in order to clarify his rights in certain assets of the Bankrupt, including the Pictorial contract. The Receiver filed a Brief in opposition to the intervention. The brief, though not dated, appears to have been filed after the hearing on the matter. The Bankruptcy Referee filed his Certificate of Referee to Judge on January 9, 1926, holding that Schmeltz had no secured claim against the Bankrupt. The Bankruptcy Referee further held to the extent such a security interest did arise, it constituted a preference. The District Judge affirmed the ruling of the Bankruptcy Referee.
Alas, the Receiver was victorious. The Receiver successfully recovered the primary asset of the Bankrupt and liquidated that asset for the benefit of all unsecured creditors. The Receiver filed his final accounting with the Bankruptcy Referee on August 23, 1927, and the case was subsequently closed.
Now you know the truth about Walt Disney and his foray into bankruptcy. He never filed bankruptcy, but instead was a principal in Laugh-O-Gram; an entity that was eventually forced into bankruptcy.
NOTE: This post is dedicated to my brother-in-law, Michael R. Gerard. Mike was an animator on a couple of Walt Disney Feature Animation productions, including Beauty and the Beast and The Prince and the Pauper. But for the successes and failures of Walt Disney, Mike might never have pursued his dream of being and animator and for that I am very thankful.
DATED: May 30, 2013
* All Laugh-O-Gram Court Documents Courtesy of the National Archives.
Do you owe too much? Too little? When filing for bankruptcy, one answer points to a rule yet the other points inward.
If you’re in over your head and are thinking about filing for bankruptcy, you’ve got too much debt.
That’s an objective measure, though. What is “too much” for me would be inconsequential for Kobe Bryant. On the flip side, what’s considered “too much” for a third-grader is likely going to be pretty small in my eyes.
Let’s take a look to see where you stand on the spectrum.
Debt Limits In Chapter 7 and Chapter 13 Bankruptcy
There is no debt limit to file for Chapter 7 bankruptcy. If you qualify for Chapter 7 bankruptcy based on means testing, you’re good to go.
The same is not true for Chapter 13 bankruptcy. As of April 1, 2013 you can file for Chapter 13 bankruptcy only if you have below $383,175 in unsecured debt and $1,149,525 in secured debt.
If you owe too much secured or unsecured debt, you need to file a Chapter 11 bankruptcy.
How Much Is Enough To File For Bankruptcy?
Here’s a simple three-part test to figure out if you owe enough money to file for bankruptcy.
- Can you afford to stop using all of your credit cards and lines of credit and make timely payments without cutting back on necessities such as food and clothing? If YES, then you may not need to file for bankruptcy.
- If you do nothing, will you be in less debt in 36 months than you are now? If YES, then you may not need to file for bankruptcy.
- Do you owe more than twice the amount of the legal fee for an attorney to represent you in a bankruptcy case? If NO, then you may not need to file for bankruptcy.
Once we get past these three questions, we can start looking at your overall financial health and whether bankruptcy is a good tool for your financial planning.
Yes, bankruptcy can be a financial planning tool for some people.
Regardless, it’s important to recognize that though there’s a ceiling for Chapter 13, there’s seldom a floor.
Image credit: Steven River
When You Have Enough Debt (And When You’ve Got Too Much) was originally published on Consumer Help Central. If you're seeing this message on another site, it has been stolen and is being used without permission. That's illegal, a violation of copyright, and just plain awful.
Proponents of relief for student loan borrowers in bankruptcy had reason to cheer this month in both Washington and Oregon. Student loan obligations are presumptively non-dischargeable in bankruptcy absent a showing of “undue hardship.” 11 U.S.C. § 523(a)(8). To determine if a debtor has shown undue hardship, courts follow the three-part test from Brunner. See In re Pena, 155 F.3d at 1111–12. Under Brunner, the debtor must prove that: (1) he cannot maintain, based on current income and
expenses, a “minimal” standard of living for himself and his dependents if required to repay the loans; (2) additional circumstances exist indicating that this state of affairs is likely to persist for a significant portion of the repayment period; and (3) the debtor has made good faith efforts to repay the loans.
In Hedlund, a recent 9th Circuit(Washington and Oregon are member states in this circuit) decision, the Court took what appears to be a more forgiving view of what might constitute good faith efforts to repay the loans (the third prong). Previously, it was not possible to obtain a discharge of student loan without a showing of near Herculean efforts to repay the loans. In Hedlund, it appears that courts may no longer require debtors to show that they attempted to do the impossible. Hedland, the plaintiff, showed that he did something, suffering 16 months of garnishments and voluntarily made less than a $1000 in payments over a four year period and that was enough to meet the third prong.
We hope that this is the start of something good, maybe even something great. Student loan creditors and collectors have been getting away with murder and third prong had been a difficult prong to meet.
The original post is titled School Loans and Bankruptcy Discharge , and it came from Oregon Bankruptcy Lawyer | Portland, Salem, and Vancouver, Wa .
Workers compensation benefits are funds made payable to an individual who was injured while on the job and unable to perform their duties due to the injury. The compensation may be considered a main source of income for the household. If bankruptcy is an option it is common to wonder if benefits can be protected [...]
You would think that the Fair Debt Collection Practices Act would apply to the employees of your Creditors. Why is that? The main reason seems to have been legislative deference to the political power of the credit industry. This means that a creditor’s in house collectors attempting to collect debts in the company name are exempt. Creditors employees do lose this protection if they use a false name indicating that a separate debt collector is involved.
It can be difficult to sort out which collectors are really collectors for purposes of determining liability under the Fair Debt Collection Practices Act. If you live in Oregon or Washington and collectors are ringing you up, ring us up so that we can help.
The original post is titled Fair Debt Collection Practices Act and Creditor Employees , and it came from Oregon Bankruptcy Lawyer | Portland, Salem, and Vancouver, Wa .
Because the FDCPA applies only to debt collectors, it is useful to look at the narrow exceptions to FDCPA coverage. For purposes of applying the FDCPA, process servers are specifically and narrowly excluded. A process server is not a debt collector while serving or attempting to serve legal process in connection with the judicial enforcement of a debt.
Process servers are protected from FDCPA coverage only while they attempt to serve process. This may not exempt a process server if, in addition to attempting to serve process, the process server sought repayment of the debt, particularly if collection were a regular aspect of the services is provided.
If you are served it is important to document the substance of your conversation with your process server. Please contact our offices immediately if you are served so that we can evaluate your case for potential FDCPA violations. We would be happy to not only evaluate services but the complaint and summons as well at one of our Washington offices in Seattle or Vancouver, or at one of our Oregon offices in either Portland or Salem.
The original post is titled , and it came from Oregon Bankruptcy Lawyer | Portland, Salem, and Vancouver, Wa .
This isn’t my usual bankruptcy fare, but it’s worth sharing and a lot more interesting. A friend of mine from college has shared some amazing drawings that his grandfather did during World War Two.
You can see the illustrations on Buzzfeed and a few are linked below.
Army Chow.
The post OT: Original WWII Illustrations appeared first on Bankruptcy Attorney Seattle and Kent.
As the weather warms and people meet for the first time in months around barbecue grills nationwide, the talk is sure to include a time-honored tradition: ‘poor talk’.
“Poor talk,” for those of you who don’t recognize the term, is when two people meet and end up talking about their money problems. It’s similar to, ‘fat talk,’ only this is money and not weight.
In the old days, people didn’t talk about money with one another. It simply wasn’t polite.
Nowadays, however, it seems as if our culture of oversharing has made it acceptable to talk money with the neighbors.
The questions are the reasons why, and whether it’s a good use of your time.
Why ‘Poor Talk’ Is So Compelling
Humans beings have a psychological need to belong to a group. We want to be wanted, and we want to be identified as part of a particular crowd.
That’s why we join clubs, social networks, and even work for particular companies.
That need to belong is a driving force behind our desire to share information that we might otherwise keep close to the vest. We hear the neighbor complaining about how his insurance costs have spiked, and we’re more likely to agree and throw in our own two cents.
But Is ‘Poor Talk’ Helping Us?
I used to think there was value in commiseration, that misery did love company. I still do, but not in the same way.
If I’m having a hard time with something, I might need a friend’s ear. That friend will nod, sympathize, and maybe give me some ideas about how to make things better. More likely, my friend will tell me the time he was in a tight spot and managed to get out of it.
That sort of, “you can do it,” talk can help motivate someone into making a positive change.
When both people are in the same boat, however, there’s nothing productive going on.
You both walk away from the conversation feeling as if you belong to the same club, so you’re not alone. That’s not terrible.
But you both also look at one another and figure that if the other guy’s not going out of his mind then perhaps you shouldn’t, either. You’re less likely to take positive action to get out of your bad situation.
In this respect, community can be a bad thing.
How To Break the Cycle
I’m not going to tell you to stop with the ‘poor talk’ – after all, it does fill a need from time to time.
I am, however, recommending that you look at the other folks engaging in this line of conversation and ask yourself about the things they’re not saying rather than merely what is coming out of their mouths.
Are they buckling down financially to end their problems?
Are they overstating the problem in the first place?
Do they have a deep well of savings from which to draw?
Questions such as these will help you realize that you don’t share the same problems as others, not in the same way at least. Nobody’s going to help you when your bills come due, and all the griping in the world won’t make your life better.
Let the neighbors worry about themselves. Your job is to get to work on your own financial well-being.
Image credit: stevendepolo
‘Poor Talk’ And The Society Of Mutually Destructive Commiseration was originally published on Consumer Help Central. If you're seeing this message on another site, it has been stolen and is being used without permission. That's illegal, a violation of copyright, and just plain awful.
Some debts are treated differently than others when it comes to the means test. Good thing, too.
When you’re looking to file bankruptcy, you go in with a set goal – to get out of debt, catch up on mortgage arrears, pay off taxes, or something similar.
Often, you’ll find that the means test doesn’t help accomplish those goals. Instead, it stands in your way like a bully in the school cafeteria.
But then you forget those debts you’re working on. Can they actually help with the means test?
Debt Payments As Means Test Deduction
The means test allows you to deduct your secured and priority debt payments from your income.
You take the total amount of secured debt payments that will come due within the next 60 months, divide by 60 to get the average monthly debt payment, and enter it on the means test as a deduction.
Then look at your priority debts – such as tax debts and child support payments that won’t be wiped out in a bankruptcy case – and do the same.
If The Remaining Term Is Less Than 60 Months
Maybe you’ve got a car loan that will be paid in full in 40 months. For means test purposes, total those 40 monthly payments and then divide by 60.
It won’t give you a deduction for the full monthly payment, but it will give you some wiggle room.
Some benefit is better than none at all.
You’ve Still Got To Pay
Listing the payments due on the secured and priority debts doesn’t mean you’re home free.
You’re still going to need to make those payments in a Chapter 7 bankruptcy (unless, in the case of secured debts, you are surrendering the property).
In a Chapter 13 bankruptcy, those priority debt payments will be added to your Chapter 13 Plan along with any arrears on the secured debts.
Still, those payment amounts may go a long way towards helping you to qualify for Chapter 7 bankruptcy when that may not have otherwise been the case.
How To File Bankruptcy: Debt Payments And The Means Test was originally published on Consumer Help Central. If you're seeing this message on another site, it has been stolen and is being used without permission. That's illegal, a violation of copyright, and just plain awful.
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