Archive for the ‘Closing Up Shop’ Category

Okay, whew knew Greece was going bankrupt? Seriously, that sucks.

The London stock market closed higher on Thursday following a European Union summit that pledged to help debt-laden Greece but announced no firm measures.

The benchmark FTSE 100 index ended 0.57 percent higher to reach 5,161.48 points.

Tomorrow is a new day, right?

Does that headline shock anyone, really? Stand outside a Wal-Mart for an hour and tell me how many people look like they are going inside to look at computers, let alone Linux based computers.

Wal-Mart has stopped selling Everex’s Linux-based PC in its stores because of a tepid response from customers, although it will continue to sell the product online, the retailer said Tuesday.

The customer response to the US$199 Everex TC2502 Green gPC desktop was not as high as expected, said Melissa O’Brien, a Wal-Mart spokeswoman..

Wal-Mart, the largest retailer in the U.S., agreed last year to carry the product as a test and stocked it in about 600 stores where it saw high interest in computers.

“The idea was to see if shoppers in our stores would respond as they do online to the offering. The answer is that customers did not respond to expectations, so we decided not to restock,” O’Brien said.

So, who sits online and ends up ordering the Linux PC’s? The housewives? The working couple who barely has time to see each other let alone find time to order a computer? The out of work realtor who has nothing better to do? No. The geeks. The nerds. The computer savvy people who know just what their getting when they decide to order a “Linux PC”. Duh.

Once everyone gets it through their head that mainstream America has no idea what Linux is, the sooner we can all move past that and work on ways to make sure people have a choice in the future.

[Crossposted at The Alligator Pit]

It seems everyone had their fingers in the subprime lending debacle. It amazes me that so many other non-mortgage related companies had mortgage units that were helping to push those ridiculous loans at people.

H&R Block Inc (HRB.N) said on Tuesday the sale of its struggling subprime home lender unit, Option One Mortgage Corp, to Cerberus Capital Management LP was terminated, a move that will trigger $75 million of charges and 620 job cuts.

Block shares were down 7.5 percent to $18 in pre-market trade.

The end of the deal “is not a good thing,” said Alexander Paris, an analyst at Barrington Research in Chicago. “There’s charges and losses, but it might be making the best out of a bad situation.”

The best out of a bad situation would find mortgage companies freezing rates and even rolling some of them back to a point where people wouldn’t actually lose their homes. It sounds better than having millions of empty homes all around the country.

I wonder how many other companies, like H&R Block, will be recording mortgage related losses before the year ends.

I better not see a shortage of frozen waffles at the grocery store or someone is going to have some explaining to do.

General Mills Inc. said in a regulatory filing Tuesday that it would close two plants that make frozen waffles and dough, cutting about 580 jobs.

In a filing with the U.S. Securities and Exchange Commission, the food company said it would close a frozen waffle plant in Allentown, Pennsylvania, with 111 employees and a frozen dough facility in Trenton, Ontario, with 470 workers.

Not only did HomeBanc suddenly lay off employees, close shop, and quickly file bankruptcy, but now, they’ve left numerous Georgia law firms holding bad checks. Something really stinks about this whole HomeBanc debacle if you ask me.

Dozens of Georgia real-estate lawyers are left holding millions of dollars worth of bad checks by HomeBanc’s sudden exit from the mortgage lending business.

HomeBanc filed for Chapter 11 bankruptcy in Wilmington, Delaware, last week — out of cash and out of a business that had flourished in its hometown of Atlanta.

Lawyers whose real-estate practices flourished along with HomeBanc had already begun worrying about the mortgage-funding checks from the big lender that they’d deposited in their escrow accounts.

In Georgia, real-estate deals are funded right at the closing table. Lawyers had written checks to sellers out of those escrow accounts.

The checks bounced, and HomeBanc names about two dozen Georgia law firms on its list of unsecured creditors. Those are the people who stand to get what’s left over after the failed mortgage company’s top lenders get paid.

It’s one thing to fall on hard times and require re-organization, it’s quite another to knowingly write bad checks and leave others holding the bag.

Failed mortgage lender HomeBanc Corp., which filed for Chapter 11 bankruptcy last week, is being threatened with foreclosure by JP Morgan Chase Bank, the lead lender on $68 million worth of operating loans.

Court papers filed Sunday in a Delaware bankruptcy court say JP Morgan Chase, as agent for the syndicate of banks that funded HomeBanc’s operations, is demanding assurances it won’t get stuck for the money.

JP Morgan Chase wants an emergency hearing Tuesday on its bid for guarantees that Atlanta-based HomeBanc will be able to cover its secured debt. The bank wants to be able to foreclose on its collateral if no assurances are forthcoming.

The number one rule when filing for Chapter 11, is to have your secured lenders on your side so they work with you during the process. HomeBanc seemed to have forgotten this important step in the process.

Usually, secured lenders don’t have to wait long to cash out their holdings in a bankrupt company. Most failing companies try to have deals for Chapter 11 loans and, often, asset sales in hand before they file bankruptcy petitions, to reassure top-ranking creditors.

HomeBanc filed its Chapter 11 petition in Delaware close to midnight Thursday, with little notice to the secured lenders it needs to have on its side, no financing and, so far, only a plan to close the last $2 million of a series of sales to Countrywide Financial Corp.

Troubled companies aren’t allowed to use the collateral securing their top loans to fund a controlled Chapter 11 shutdown unless the lenders agree to let them.

Oops. I still find it hilarious that all these companies are “shell shocked” by the whole subprime lending fiasco. You can’t tell me that they couldn’t see this coming for a long time.

I think we all saw this coming…

Mortgage lender American Home Mortgage Investment Corp (AHM.N) is closing its doors on Friday, and has told employees they will be laid off, according to the Long Island newspaper Newsday, citing an e-mail to employees from Chief Executive Michael Strauss.

…

The news shows how problems in the U.S. mortgage market are broadening, as credit quality issues begin to affect lenders that focused on borrowers with decent credit, as opposed to “subprime” borrowers thought to be greater risks.

I just don’t think we thought it would happen this week. I wonder how bumpy the real estate road is going to get over the next couple months?