Creditors Practice

CFPB Fines Tennessee Payday Lender for 'Abusive' Practices

Payday lender Cash Express LLC was fined last week by the Consumer Financial Protection Bureau after the agency found several of the firm's debt-collection practices to be in violation of the Consumer Financial Protection Act, The Wall Street Journal reports. The bureau said the Cookeville-based company would deceive customers by threatening legal action over debts that were past the statute of limitations.  Additionally, the bureau said the company told customers it was sending negative information about them to credit-reporting firms, even though it did not send this type of report. The bureau labeled one practice as “abusive,” claiming the company would withhold money from a check-cashing transaction to pay down an outstanding debt, without telling the customer. The company was ordered to pay a $200,000 civil penalty and to return $32,000 to affected customers.

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U.S. Bankruptcy Judge Rules in Favor of Toys 'R' Us

U.S. Bankruptcy Judge Keith L. Phillips ordered Fung Retailing Ltd., a joint venture partner of Toys “R” Us Inc., to drop a court action against the retailer yesterday in Richmond, Virginia, Bloomberg reports. This decision negates a Hong Kong court order to suspend the auction of Toys’ Asia operation, of which Fung owns 15 percent stake. Fung claims it will be harmed by the way Toys is pursuing a sale, while Toys claims Fung is attempting to scare off opposing bidders in order to buy out Toys’ stake at a discount.   

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Mt. Gox Opens Online Claim Filing for Corporate Creditors

Corporate creditors are now able to enter claims for refunds of crypto assets held by the now-defunct Tokyo based Bitcoin (BTC) exchange, Mt. Gox, CoinDesk reports. In early 2014, Mt. Gox was hacked and nearly 750,000 BTC was stolen, valued around $473 million at the time. The theft quickly led to the exchange’s bankruptcy. Mt. Gox creditors have been working for years to retrieve their funds. Last year, creditors filed a petition to move Mt. Gox out of the bankruptcy case and into civil rehabilitation; it was approved this June. Former corporate users have until Oct. 22 to file proof backing up their refund claims.

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Former Toys ‘R’ Us Employees Seek Severance From Lenders

Two worker advocacy groups are seeking additional severance funds from lenders that financed this year’s bankruptcy and liquidation of the toy store chain Toys “R” Us, Bloomberg reports. The lending companies, Angelo Gordon & Co. LP and Solus Alternative Asset Management, have responded with no intention of providing additional funds after already ensuring employees received full payment for the 60-day period following a WARN notice pursuant to the Worker Adjustment and Retraining Notification Act. Two of the three firms that purchased the company a decade ago in a leveraged buyout have agreed to contribute to help meet the $75 million needed to pay for 33,000 employee severances.  

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