It seemed like during the pandemic, there were headlines of a massive company declaring Chapter 11 bankruptcy almost every day. While the market calmed down for a bit, bankruptcy filings- particularly Chapter 11 bankruptcy filings- are back up. One Chapter 11 bankruptcy filing that has been relevant for many Arizonans this year has been Diamond Sports Group. This company has been responsible for broadcasting the Arizona Diamondbacks’ games since purchasing the rights from Sinclair Broadcast Company in 2019. On July 18, 2023, a bankruptcy court ruled that the MLB could take over broadcasting Arizona Diamondbacks games due to Diamond Sports Group’s financial troubles. The MLB plans on airing Diamondbacks games without blackouts and making them available on its streaming service. If you’re considering filing for bankruptcy in the Tucson area, our firm can help you get started on the right track. To set up your free consultation, click here or call 520-307-0020.
Diamond Sports Group’s Bankruptcy
Diamond Sports Group, which also owns Bally Sports, declared Chapter 11 bankruptcy and reported debts exceeding $8.5 billion. As mentioned above, the company purchased the broadcasting rights for Diamondbacks games from Sinclair Broadcast Company in 2019- the purchase price was $10 billion including rights to other teams as well. Through that contract, Diamond Sports Group had a 20-year deal with the Diamondbacks for 20 years and $1.5 billion. Diamond Sports Group asked the bankruptcy court to reject that contract with an offer from the MLB to take over Diamondbacks broadcasting at 80% of the contract value. It appears that the MLB will be paying the Diamondbacks contract in full for the current season, but it’s unclear how much they will be paying for 2024 and onward. Now that the MLB will be responsible for airing Diamondbacks games and lifting blackout restrictions, they will be available to 5.6 million households.
What is Chapter 11 Bankruptcy?
Many people have little concept of how Chapter 11 bankruptcy works because Chapter 7 and Chapter 13 have much higher filing rates. Chapter 11 bankruptcy is usually beyond the needs of the average bankruptcy debtor, but it does have provisions available for small business owners. Chapter 11 bankruptcy offers businesses the benefit of staying open and attempting to become profitable once more through the filing. Usually, a committee of the debtor’s top creditors is formed upon a Chapter 11 bankruptcy petition filing. The small business provisions allow a debtor to skip this step and speed up the bankruptcy process in general. Once the debtor and creditor committee agree on how the debtor should come out of bankruptcy and the court signs off, it is up to the debtor to act. The business will maintain control of its day-to-day operations while the case is pending.
Should I File Chapter 11 Bankruptcy?
Chances are, if you’re reading this, you aren’t the CEO of a major corporation. But you may own your own small business that is struggling with debts. If so, chapter 11 bankruptcy might be useful and allow you to preserve your livelihood. But more than likely, your needs would be better served by filing Chapter 7 or Chapter 13. Both of these chapters are generally less complicated and more affordable for the average bankruptcy debtor.
Chapter 7 bankruptcy is the most frequently filed chapter of bankruptcy. It is popular for many reasons. It is the fastest and simplest of the available forms of consumer bankruptcy. A Chapter 7 bankruptcy typically will only last 3 to 6 months from filing to discharge. It can erase many types of unsecured debts, including credit cards, medical bills, and personal loans. It is hardly the financial death sentence some used to believe it to be, especially in this turbulent economy. A bankruptcy debtor is also protected during their bankruptcy by a legal mechanism called the automatic stay. The automatic stay stops wage garnishments, lawsuits, repossessions, and more, which can be crucial to stabilizing the debtor’s financial situation. However, there are many limitations to Chapter 7 bankruptcy. Among other restrictions, the debtor must either earn less than the state median income or pass the means test to qualify based on income for Chapter 7 bankruptcy. To see if you qualify, call to schedule your free evaluation with one of our Tucson bankruptcy lawyers at 520-307-0020 or click here.
Chapter 13 bankruptcy is meant for debtors with higher income who need to pay off secured debts and other debts that are ineligible for discharge in Chapter 7 bankruptcy. Chapter 13 bankruptcy lasts 5 years for debtors who earn more than Arizona’s median income, and 3 years for debtors who earn less. The first type of debt to be paid off in Chapter 13 is bankruptcy fees, including court fees and your attorney’s fees. Second, secured debts will be paid off in the Chapter 13 payment plan. Next, priority debts need to be paid. The last type of debt paid off in a Chapter 13 payment plan is unsecured debt. These are the debts that would be dischargeable in Chapter 7 bankruptcy. If the debtor’s disposable income isn’t high enough to pay off all the unsecured debts, some or all of them may be discharged at the end of the payment plan. A bankruptcy attorney who is practiced in Chapter 13 cases can help you determine if you qualify for Chapter 13 and how much your monthly payments would be. To schedule your free consultation with our firm, click here or call 520-307-0020.
The Benefits of Declaring Bankruptcy
Filing for bankruptcy is a major decision that should be planned carefully, ideally with the assistance of a skilled bankruptcy lawyer. There are some drawbacks to declaring bankruptcy- for example, you will lose your credit cards and the filing will remain on your credit history for several years. But bankruptcy also provides tremendous benefits for anyone facing insurmountable debts, including:
- Clearing debts with little to no repayment
- Activating the automatic stay, which can stop lawsuits, wage garnishments, repossessions, foreclosures, utility shutoffs, and more
- Stopping creditor calls and harassment during the bankruptcy preparation process
- Creating opportunities to rebuild your credit and build a more positive credit history
- Offering the option to surrender a financed vehicle or another asset that has a higher loan balance than its market value
- Closing out other unexpired leases and contracts
- Learning more about how to avoid amassing debts in the future
- Making more income available to pay off debts that can’t be discharged in bankruptcy
- Improving your credit history and score for future financial endeavors
Affordable, Reliable Bankruptcy Representation for Tucson Residents
If you’re thinking about declaring bankruptcy, you’ve probably been experiencing a stressful period in your life. You can ease some of the burden by hiring an expert to guide you through the process. Our Tucson bankruptcy team will help make bankruptcy easy, and that includes paying for it- we offer affordable payment plan options starting as low as zero dollars down. Guard yourself from creditors and begin working towards a brighter financial future. Initiate the process by scheduling your free debt evaluation with one of our experienced bankruptcy lawyers. To get started, click here or call 520-307-0020.
TUCSON BANKRUPTCY ATTORNEYS
2 East Congress Street, Suite #900-6A
Tucson, AZ 85701
Office: (520) 307-0020