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Here is an interresting article from WSJ.

“The number of Americans filing for personal bankruptcy rose by nearly a third in 2009, a surge largely driven by foreclosures and job losses.

And more people are filing for Chapter 7 bankruptcy, which liquidates assets to pay off some debts and absolves the filers of others. That is significant because a 2005 overhaul of federal bankruptcy laws aimed to encourage Chapter 13 filings, which force consumers to sign onto debt-repayment plans in exchange for keeping certain assets.

The changes were designed to make it more difficult for people to shed their debt, particularly in a Chapter 7 filling. A “means” test, for example, was introduced to separate those who could afford to repay their debt from those who couldn’t. A Chapter 7 filing is off the table if the means test determines a person is able to pay back at least a portion of the debt after it is restructured.

The worst U.S. recession in a generation is testing the effectiveness of these laws. The economic downturn also has prompted more middle-class Americans to file for bankruptcy protection.

Overall, personal bankruptcy filings hit 1.41 million last year, up 32% from 2008, according to the National Bankruptcy Research Center, which compiles and analyzes bankruptcy data. It is the highest level of consumer-bankruptcy fillings since 2005. Consumers rushed to file in 2005 before the new bankruptcy laws took effect in October of that year.

Chapter 7 filings were up more than 42% as of November 2009, compared with the same period a year earlier, according to the research center. November is the most recent month with analyzed data available. Chapter 13 filings rose by 12% and made up less than a third of 2009 filings as of November.

“That suggests it was largely ineffective,” Ronald Mann, a law professor at Columbia University, said of the 2005 overhaul. “I don’t think anybody who’s knowledgeable about the bankruptcy system thought the statute was well crafted.”

Read the full article here.

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Oracle, Dell, Xerox and now HP – the high tech world as we knew it is changing fast. Companies that previously stood their ground and was seen as pillars of innovation are know swallowed into mega-companies that will challenge the marketplace with new services, products and offerings. Here is some selected tidbits from BusinessWeek in regards to the deal.

“Through its acquisition of networking gear maker 3Com, Hewlett-Packard will accelerate competition with Cisco Systems (CSCO), especially in China, practically overnight. Then comes the hard part. To make the most of the $2.7 billion deal, HP also needs to revitalize 3Com’s faded brand and persuade Western companies to take a chance on its products, designed largely in Asia.

Analysts were quick to see the logic in the planned acquisition, announced on Nov. 11. HP (HPQ) is attacking Cisco’s dominance of the market for gear that connects computers just as Cisco moves more aggressively into the market for computer systems, where HP is strong. Cisco on Nov. 3 struck a partnership with storage company EMC (EMC) and software company VMware (VMW) aimed atsupplying bundles of computers, storage, networking, and software.”

The article continues…

“HP’s bigger challenge in making the deal a success will be removing the tarnish that remains on the 3Com ‘s brand in the U.S. and Europe as a result of years of mismanagement. While 3Com’s data-center networking gear has about 35% of the Chinese market, it’s practically absent from the largest companies in the U.S. and Europe, analysts say.”

Read the full article here.

Other good resources for this topic include: Barrons, WSJ, 24/7 Wall St., Mashable & Techcrunch.

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Here is a interesting article posted at WSJ Venture Dispatch.

“Wallenstein, one of the first four employees and former vice president of sales at Recordant, a provider of sales analytics technology, said he purchased the company’s patents, software and trademarks at a bankruptcy auction last month for $1,000.”

The article continues…

“Recordant took in $12 million in venture capital before filing for bankruptcy in February. It raised $3 million in Series A financing from Kodiak Venture Partners in 2005 and 2006, followed by a $9 million Series B round led by FirstMark Capital, which was then called Pequot Ventures. Aurora Funds also participated in the later round.

Recordant sold a device, about the size of a small iPod, that could be worn by sales and customer service representatives to record their interactions with customers. The company also sold software to perform analytics to help its customers identify key words associated with a sale.

Founded in 2003, with its first products on the market in 2006, Recordant focused on retail, automotive, banking and hospitality industries. It fell victim to longer-than-expected sales cycles that became too much to bear when the economic crisis hit, and filed for Chapter 7 bankruptcy in February.”

With no plans to raise money the company stands a good chance to run on a bootstrap.

“After extensive use of Recordant’s products by the U.S. National Guard, the U.S. Army had a contract to put the technology to use in their recruiting centers, but that fell through when the banking crisis hit, May said. It was also set to follow up a pilot program with an undisclosed insurance company to put the technology in 10,000 of its offices, he said. That company later declared a $1 billion loss, putting the project on hold indefinitely, he said.

May still remains confident about the potential of the business. “Somebody is going to do this someday, because there is a need for it,” he said. “We saw and heard things that were absolutely amazing in good ways and bad.”

Read the full article here.

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Putting cash into unhealthy business has long been understood as a bad deal. With the Bailout programs and the TARP initiative, some might have thought that the problem was solved – think again. Poor business remain poor business.

Here are some good quotes taken from NY Times.

“The results of the bank stress tests have been trickling out for days, from Washington and from Wall Street, and the leaks seem to confirm what many bankers feel in their bones: despite all those bailouts, some of the nation’s largest banks still need more money.

But that does not necessarily mean the banks will get that money from the government. The findings, to be released Thursday by the Obama administration, suggest that the rescue money that Congress has already approved will be enough to fill the gaps. If so, the big bailouts for the banks may be over.But hopes that the tests will be a turning point in this financial crisis electrified Wall Street on Wednesday and some overseas markets the next day. Financial shares soared, lifting the broader American stock market to its highest level in four months. The Dow Jones industrial average rose 101.63, or 1.2 percent, to close at 8,512.28 Wednesday, while Japan’s Nikkei index rose more than 4 percent by midday Thursday.”

Good news indeed, but…

“After news this week that Bank of America and Citigroup would be required to bolster their finances again, word came Wednesday that regulators had determined that Wells Fargo and GMAC, the deeply troubled financial arm of General Motors, would need to do so as well. But regulators decided that American Express, Capital One, Bank of New York Mellon, Goldman Sachs, JPMorgan Chase and MetLife would not need to take action. The official word is due at 5 p.m. Thursday.

The results so far seem to suggest that the 19 institutions that underwent these exams will need less than $100 billion in additional equity to cope with a deep recession, far less than some investors had feared. The question now is, where will banks get that capital?”

Read the full article here.

Other helpful sources on this issue can be found here: Huffington Post, Barrons Blogs, Wall Street Journal, Seeking Alpha, 24/7 WallStreet

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