Monday, July 7, 2008

Oregon Bankruptcies Increase In 2008

From the Portland Business Journal:

Breakpoint Tennis Inc.'s breaking point came on May 24. Torrent Energy Corp lost some of its vim on June 2. Clackamas County developer Tony Marnella's three companies developed issues that came to light April 14.
And Matrix Development/Legend Homes took less-than-legendary, if necessary, measures June 10.
The common thread is bankruptcy, which is skyrocketing among businesses and individuals. Filings rose by 20.8 percent from March 2007 to March 2008 in Oregon, according to the Administrative Office of United States Courts. The 689 business-related bankruptcy filings for 2008's first three months marked a 27 percent jump over 2007's first three months.
Oregon business bankruptices rose 18 percent during the 12-month period ending March 31.
"Bankruptcy lawyers are like the canary in the coal mine: When we get busy, it indicates that the economy is getting worse," said Ann Chapman, a partner with Portland bankruptcy law firm Vanden Bos & Chapman LLP. "And lately, our phones have been ringing off the hook."

Marnella, who'd blogged 25 days before filing bankruptcy that the media had overstated the housing industry's woes, paid Portland-based Sussman Shank LLP a $149,000 retainer to rectify his firm's credit issues.
Portland's Legend Homes declared bankruptcy after its Matrix arm suffered big hits on land acquisition. One option was to reduce debt by selling properties for 30 cents on the dollar.
Legend, which owed nearly $40 million to five of its more than 200 creditors, filed Chapter 11 instead after recognizing that its banking lenders would soon call in debts faster than it could pay them.
"We're actually up 136 sales for 2008 over last year, and it's a profitable operation," said Jim Chapman, the firm's president. "But with changes in the banking climate, we felt we needed help in restructuring things."