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The Evolutionary Perspective
Category Archives: Bankruptcy
Posted: June 25, 2017 at 2:44 pm
Legendarybankruptcy expert Dr. Edward Altmancautioned that this benign credit cycle characterized by low default rates, low yields, low spreads, and lots of liquidity could come to an abrupt end.
Its been a terrific market for investors for quite a long time and if anything is concerning its that we now are more than eight years into a benign credit cycle, Altman, a professor at NYU Stern School of Business, told Yahoo Finance. Weve never had such a long benign cycle. And just that one little fact is something that we should be concerned about because if it comes to one and it could come to an end very dramatically.
Altman, the creator of the financial-distress sniffingAltman Z-Score, warned in mid-2007 of a Great Credit Bubble and that there was going to be trouble in the market.He predictedthat a meltdown would stem from corporate defaults. While the primary culprit of the financial crisis turned out to be mortgage-backed securities, investors who heeded Altmans warning nevertheless avoided a lot of grief.
So, how does todays market compare to the market in 2007.
There are some similarities, yes, although the situation back in the great financial crisis was pre-meditated by the mortgage-backed securities and we dont have that problem now, he said.
Troublingly, Altmansees the reckless behaviorof 2007 surfacing again.
Lehman Brothers world headquarters is shown in New York, the day the 158-year-old investment bank, choked by the credit crisis and falling real estate values, filed for bankruptcy. (AP Photo/Mark Lennihan)
Back in 2007 prior to the crisis in 08 and 09, the fundamentals of credit risk of the companies issuing bonds and taking out loans were quite low, he said.And the similarity that I see now between 2007 and 2016 is very similar fundamentals, quite a bit high risk and it doesnt seem to bother the market because its the only game in town in terms of getting yield greater than what you can get for low-risk securities like governments and high-grade corporates.
In other words, investors arent buying junk bonds just because the risk-reward balance is favorable. Theyre buying because the rewards of investing in lower risk bonds just arent cutting it anymore.
Altman is perhaps best known for the Z-Score, a formula he created 50 years ago thats used to predict bankruptcies. Since that time, he noticed that bankruptcies have gotten increasingly bigger.
[What] Ive seen over the years is larger and larger companies filing for bankruptcy on a regular basis. On average, in the United States, something like 15 more than $1 billion companies, in terms of liabilities, go bankrupt every year, on average, Altman said. This year already its 13. Last year, it was almost 40.
He noted that inflation has something to do with it, but whats actually happening is companies have been taking advantage of debt and low interest rates like never before, and the corporate debt ratios are way up.
Speaking about the Z-score, if you compare the average Z-score of companies in 2007 with the average in 2016, which is the last time we looked at it, guess what. The average is actually lower today than it was in 2007, and 2007 was right before the great financial crisis, and of course, in 08 and 09 we saw a tremendous increase in corporate bond defaults and loans.
Low Z-scores are associated with financial distress.
He added: So the good news is that its no worse, but the bad news is, fundamentally, the companies are no better than they were back in 2007at least by our model.
At the moment whats keeping companies from going bankrupt as they did during the financial crisis is the incredible amount of liquidity and lowinterest rates.
Well see how long that lasts.
Julia La Roche is a finance reporter at Yahoo Finance. Follow her on Twitter.
Posted: at 2:44 pm
Italy will pay up to 17 billion euros ($19 billion) to rescue two Venetian banks that are facing bankruptcy, the government said Sunday.
“The total resources mobilised could reach a maximum of 17 billion euros — but the immediate cost to the state is a little more than five billion,” said Finance Minister Pier Carlo Padoan.
After Brussels had last week firmly placed the liquidation ball in Rome’s court, Padoan’s ministry said Friday night the government would put up around 10 billion euros of state cash to rescue the stricken Banca Popolare di Vicenza and Veneto Banca.
Both face bankruptcy and European authorities had urged Italy to devise a rescue framework, selling off their good assets and transferring toxic assets to a “bad bank,” essentially financed by Rome.
Padoan said about 4.8 billion euros would be set aside immediately to “maintain capitalisation” of retail bank Intesa Sanpaolo, which had made that a condition of any cooperation.
Intesa, Italy’s biggest retail bank, has put one symbolic euro on the table and attached a further string to the deal by insisting its share dividend policy remain unaffected.
Rome will provide a further “guarantee” of 400 million euros, Padoan said, with the remaining cash going to cover a huge hole due to bad loans.
“This decree allows the stabilisation of the Venetian economy and safeguarding of the economic activity of the Venetian banks,” Padoan said.
Read the rest here:
Posted: at 2:44 pm
Kazuhiro Nogi | AFP | Getty Images
The logo of the Japanese auto parts maker Takata is displayed at a car showroom in Tokyo on January 13, 2017.
Takata’s board is convening to review bankruptcy plans over the weekend, The Wall Street Journal reported, citing sources.
The company is planning bankruptcy filings in both the U.S. and Japan, and has tentative plans to sell operations to rival firm Key Safety Systems for $1.6 billion, sources told the Journal.
Sumitomo Mitsui Banking is reportedly providing the company with bankruptcy financing, the report said.
The auto parts supplier made the airbag components that spawned lawsuits against several major automakers after the devices were linked to deaths and injuries. The company pleaded guilty to criminal wrongdoing and was told to pay $1 billion in penalties for giving automakers misleading safety reports on the airbag systems.
In the U.S., 19 automakers are still recalling the 42 million vehicles outfitted with Takata airbags, the Journal said.
In May, Toyota, Subaru, Mazda and BMW all settled with plaintiffs for more than $550 million.
Read the full story in The Wall Street Journal
Read more here:
Posted: June 24, 2017 at 2:58 pm
Sears Canada Inc. (NASDAQ:SRSC) filed for bankruptcy on June 22 in Canada under the Companies’ Creditors Arrangement Act (CCAA). While this has only a minor direct impact on Sears Holdings Corp. (NASDAQ:SHLD), the indirect impact is significant. If Eddie Lampert is willing to throw in the towel on his equity investment in SRSC, it could indicate that he is not willing to pour more of his cash into propping up SHLD. In addition, vendors who were already nervous about dealing with Sears may stop shipping goods for the critical Back to School and Fall shopping season. In my opinion, SRSC’s bankruptcy filing is just a dress rehearsal for a Chapter 11 filing by SHLD in July.
Canadian Bankruptcy Laws
Sears Canada filed under the CCAA instead of the Bankruptcy and Insolvency Act (BIA), which would have resulted in complete liquidation. There are two critical points in the CCAA that differ from Chapter 11 bankruptcy in the U.S. A monitor, in this case FTI Consulting, is appointed by the court, who has oversight authority but does not control day-to-day operations. The first critical point is that the monitor has supervision over the sale of assets, and not Eddie Lampert. The second point is that the monitor is required to report to the Superintendent of Bankruptcy when they feel creditors would be better off if the case was switched to BIA, which would mean total liquidation.
A June 22 Pre-Filing Report prepared by FTI Consulting contains a large amount of useful information. According to the report, SRSC had cash outflows of C$30-100 million per month over the last 5 months, and in May was burning C$20 million a week. The company only had C$139 million on June 19. Without new sources for cash, it was forced to file.
Its current plan entails: closing 59 stores and laying off 2,900 employees; getting a C$300 million DIP revolving loan at LIBOR+4.5% and a $150 USD equivalent term loan at LIBOR+11% which mature on December 20, 2017; trying to get the authority to suspend certain pension and retiree benefit payments; creating a C$9.2 million key employee retention plan.
A key item mentioned in the report was that the company would try to get “interest in a range of potential transactions involving all or part of the assets or businesses of Sears Canada Group”. It is critical to remember that this will be done “under the supervision of the monitor”, and not by Lampert.
Below are the cash flow and operational projections until September 16. According to FTI Consulting’s forecast, SRSC will only have a negative C$25.7 million operating cash outflow during the 13-week period. It is only closing 59 stores, and it would seem unrealistic to expect that the current burn rate of cash would improve so significantly.
Cash Flow Forecast Until September 16, 2017
13-Week Operating Forecast
Impact on Sears Holdings Corp.
To many SHLD shareholders this information about SRSC may be interesting, but they feel it has little impact on SHLD because SHLD only owns 12% of SRSC and a loss of a few million dollars will not kill SHLD. Correct, but the indirect impact will most likely have a very significant negative impact on SHLD shareholders.
Prior to the filing, SRSC was able to arrange for about C$109 million in financing, but it needed C$175 million. Lampert did not step up and loan the company the other C$68 million. Does this indicate he will no longer be ready to step up and loan SHLD when other financing sources are not? Lampert also owns about 45% of SRSC, and there is a very real possibility that he will get no recovery.
Unlike Chapter 11 bankruptcy in the U.S., where the company/management still has almost complete control of the bankrupt company, in Canada the monitor has a major voice in the bankruptcy process. One can only speculate to conclude that Lampert has finally decided an in-court process is the better way to deal with operations that burn cash, especially since in Chapter 11 he is able wipe out unsecured creditors, shareholders, and certain pension liabilities, while using his and Bruce Berkowitz’s secured debt as means to own a large portion of a “new” Sears Holdings.
Some investors are taking the opposite opinion on the SRSC filing. They assert that not proposing to liquidate, but instead to continue operating and selling just some stores, demonstrates Lampert’s willingness to pursue his turnaround plans. This could explain the pop in SHLD shares on the day SRSC filed. The reality is that the above extremely low cash burn projections are unrealistic. The company was burning C$20 million per week, but now, all of sudden, this is forecast to improve. This is just another example of Lampert’s unrealistic retail expectations. FTI Consulting, as monitor, decides if the operations continue or if the company liquidates going forward, and not Lampert. FTI was retained by Sears Canada last November as consultant, and its reputation as Licensed Insolvency Trustee now as appointed court monitor would dictate its need to be prudent in supervising the cash flow, and it would be quick to inform the Superintendent of Bankruptcy that a liquidation of assets is necessary to protect creditors instead of continuing to operate.
Vendors are the Achilles’ Heel for SHLD. The SRSC bankruptcy filing tore this tendon. There is a very real possibility that vendors will now be even less likely to deal with SHLD after SRSC filed for protection. I would assume that many vendors supply both companies, and now they are not getting paid for goods they delivered to SRSC that were not paid for prior to June 22, because the CCAA prohibits the payment for any goods or services provided before the filing date. The unpaid vendors now need to file a claim and may get less than the full amount. Those goods delivered after the bankruptcy filing will, however, be paid (This is the same as under Chapter 11 in the U.S.)
Why would vendors deliver goods now and risk getting only partial payment under the Chapter 11 claims procedure? Why not wait until after SHLD files for Chapter 11 and get paid the full amount as a priority claim under Chapter 11. After SHLD files for Chapter 11, many vendors will be eager to do business with the company again because they know they will be paid in full.
Other Recent News
Sears is closing 20 more stores. Some view this as a positive move to reduce negative cash flow. Others view it as a negative because there are fewer stores trying to support the same amount of debt. Barron’s posted an article with an interesting title: “Fraudulent Conveyance Rules May Pave Way for Sears Bankruptcy in July”. An article I wrote about Sears in April had the same idea.
Eddie Lampert’s unwillingness to lend SRSC cash as the “lender of last resort” and the bankruptcy filing of SRSC could signal that he finally realizes SHLD also needs court protection to stop the cash bleeding. At least in the U.S. under Chapter 11, he does not have to cede power to a court-appointed monitor, which will mostly likely not be easy for his ego to accept. While the current plan is for the Canadian operations to continue with a modest reduction in number of stores, continued cash flow issues could force SRSC into a formal liquidation.
Sears’s real problem in the near future is vendors, and this filing has made that problem acute. The reality is that the best way to deal with these issues is to file for Chapter 11 bankruptcy in early July, so that vendors will deliver the needed Back to School and Fall merchandise. I still expect to see a Chapter 11 filing, and therefore, rate all SHLD securities a Sell.
Disclosure: I am/we are short SHLD.
I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
Additional disclosure: I am naked SHLD call options.
Editor’s Note: This article covers one or more stocks trading at less than $1 per share and/or with less than a $100 million market cap. Please be aware of the risks associated with these stocks.
Here is the original post:
Posted: at 2:58 pm
On Michele Kims first day clerking for U.S. Bankruptcy Court Judge John S. Dalis, he told her he had the best job in the world, she later said. Kim is about to find out for herself.
On Friday afternoon in the historic federal courthouse in Augusta, Kim was sworn in as the newest Bankruptcy Court judge in the Southern District of Georgia.
An Augusta native, Kim graduated from the University of Georgia School of Law with honors in 2006 and was admitted to the bar the next year. In addition to clerking for Dalis, Kim clerked for Judge Anthony Alaimo. She worked for the King & Spalding law firm in its Atlanta office specializing in financial restructuring and bankruptcy law.
Get used to the view, District Court Chief Judge J. Randal Hall told Kim as she took a seat on the judges bench with Hall and Chief Bankruptcy Court Judge Susan D. Barrett.
Its important for a judge to have good character, integrity and ability, Hall said. Kim has all of those qualities and more, he added.
Dalis, who retired Jan. 31 after nearly 30 years on the bench, said Friday that he and his wife were as proud as parents. He has known Kim for more than 30 years and knows she will serve with honor.
With assistance from her husband, Ryan Babcock, and mother, Hyun-Sook Kim, Kim donned the black robe she will wear for her judicial career.
She will serve as the Bankruptcy Court judge in the Brunswick courthouse.
Reach Sandy Hodson at (706) 823-3226or email@example.com.
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Posted: June 23, 2017 at 6:46 am
Sears Canada, which has more than 200 stores and about 17,000 employees, was spun-off as an independent company in 2012. But the filing is still bad news for Sears Holdings (SHLD), which owns both the Sears and Kmart brands in the United States. Sears Holdings still owns 12% of its shares.
Sears Holdings CEO and principal shareholder Eddie Lampert, who has been struggling to keep the company afloat amid its own mounting losses, owns a total of 45% of Sears Canada both personally and through his hedge fund.
The bankruptcy filing was not a surprise. Sears Canada said a week ago that it was in danger of running out of the cash it needed to fund operations. Thursday’s filing said that it expects to remain in business.
Related: Retail bloodbath – Bankruptcy filings are up
Sears Canada said that recent changes to its stores are starting to resonate with consumers, but it had to file for bankruptcy to give it the time it needed to let those changes take hold. In the last quarter alone, Sears Canada burned through about 30% of its cash and maxed out its existing credit lines. It said it had planned to borrow 175 million Canadian dollars to fund operations, but after negotiations with lenders it found it could only secure only C$109 million in additional loans.
Sears Canada said it hoped to be able to restructure and emerge from bankruptcy later this year. It did not give any details about store closing plans or staff cuts it might make as part of its restructuring.
In March, Sears Holdings also issued a warning about there being “substantial doubt” it could stay in business. But that warning, as serious as it was, did not paint the dire picture of a company running out of cash in the near term as did Sears Canada’s warning last week.
Sears and Sears Canada are hardly the only struggling retailers. In the United States, retail bankruptcies are up about 30% so far this year, according to BankruptcyData.com. Well known names including RadioShack, Gymboree, Sports Authority and Payless Shoes have all filed for bankruptcy within the last year. Total store closings across the U.S. are likely to reach record levels this year.
By some estimates, 25% of U.S. malls could close within the next five years. Department stores have shed 46% of their workers since 2001, a greater percentage of their jobs than coal mines or factories have lost over the same period.
CNNMoney (New York) First published June 22, 2017: 8:41 AM ET
The rest is here:
Posted: at 6:46 am
Puerto Rico opened a new “chapter” in distressed securities investing when it filed for court protection in early May. However, in this case it is not a chapter of the bankruptcy code such as Chapter 11 (which generally applies to companies) or Chapter 9 (which applies to municipalities). Because Puerto Rico is an unincorporated territory of the U.S., it was not eligible for traditional bankruptcy protection. Instead it filed under a new statute that was passed last year by Congress primarily to deal with the island’s problems.
After years of economic decline, Puerto Rico is now in default on an estimated $74 billion of bond debt. On top of that, the Commonwealth has approximately $49 billion of pension obligations and an ongoing need for funds to provide basic government services. Because of special tax law provisions that exempt the territory’s debt from not only federal taxes but also state taxes in every state, the bonds are widely held by investors across the country. Since the legal action is under a new law that has never been tested, there is tremendous uncertainty about how much creditors will recover and how long the process will take.
Distressed bond investors seem to be favoring either the territory’s general obligation (or “GO”) bonds or its bonds backed by sales tax revenues (known as “COFINAs”) both currently trading around 50 cents on the dollar, and there are many other Puerto Rican bonds trading at even lower levels. But there may be opportunities for stock investors to profit from the island’s restructuring as well, perhaps with less downside risk than in many of the bonds.
Our most recent newsletter details four public companies based in Puerto Rico that could benefit from stabilization in the island’s finances. Those companies are detailed below, and an additional three three major insurance companies with exposure to Puerto Rican debt can be found in The Turnaround Letter. Learn more about these contrarian Puerto Rico investing opportunities.
Closing prices on May 31, 2017
Ambac (NASDAQ:AMBC) – At the most strategic level, the Ambac story is straightforward: an insurer of municipal bonds with an impressive new CEO that is strengthening the company’s balance sheet, working off its obligations following its 2010 bankruptcy, reducing risks and building book value. Underneath is a highly complicated financial and legal structure that even most of Wall Street avoids as only a few analysts cover the stock. The shares trade at 63% of adjusted book value, and near their post-emergence lows. Much of the concern is related to Ambac’s $276 million of exposure to the Puerto Rico General Fund debt and $2.1 billion in current exposure to Puerto Rican municipal debt. While the eventual costs to Ambac are unknowable, the company has established reserves that would cover the most likely outcomes. There could be an interesting opportunity developing in Ambac.
Assured Guaranty (NYSE:AGO) – Assured Guaranty is probably the strongest player in the bond insurance business. Its exposure to Puerto Rico is relatively modest, and it could buy up competitors if they falter. Management has been aggressively working to boost shareholder value through stock buybacks. The stock has performed well over the last few years, but it could rise a lot further.
Evertec (NYSE:EVTC) – Evertec, with sales of nearly $400 million, is a full-service transaction processing business similar to Turnaround Letter recommendation First Data Corporation (NYSE:FDC), with operations in 18 countries across Latin America. The company was created in 2004 as a unit inside of Popular, Inc. (the Puerto Rico bank), which still owns a 16% stake. Apollo Management bought a 51% stake in 2010, and then exited following Evertec’s IPO in 2013. Despite the weak local economy, Evertec continues to grow its revenues and profits through both organic expansion and acquisitions. The company’s debt is moderately elevated at 3.3x EBITDA, but management is committed to reducing this. Management appears capable and brings considerable experience from larger industry peers. At an attractive 9.7x EBITDA, this under-followed stock is worth a closer look.
First Bancorp (NYSE:FBP) – With $12 billion in assets, First Bancorp is Puerto Rico’s second-largest local bank. Loan quality is a struggle, as non-performing loans are over 5% of its loan book, but this is largely offset by a high level of capital (its Tier 1 common equity ratio is 18.2%). First Bancorp’s net interest margin is wide, at nearly 4.5%, compared to less than 2.5% at most U.S. banks. Several major shareholders have been selling, including the U.S. Treasury, which completed its sale under the TARP program as well as private equity firms Oaktree and Thomas H. Lee, and this has been weighing on the stock price. While there are definitely risks here, the stock’s valuation at 67% of tangible book value (many banks trade at 100-200%) and 11.9x this year’s expected earnings appears to be a bargain.
Disclosure: I am/we are long AMBC.
I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.
Posted: at 6:46 am
Foundation Healthcare (f/k/a Graymark Healthcare) and subsidiary University General Hospital (UGH) filed for Chapter 11 protection with the U.S. Bankruptcy Court in the Northern District of Texas, lead case number 17-42571. The Company, which owns and operates surgical hospitals, is represented by Vickie L. Driver of Husch Blackwell.
According to documents filed with the Court, As of June 30, 2016, FHI had extensive accumulated and working capital deficits.FHI was unable to address the cash flow shortage either through the sale of assets, increase in revenues, decrease in expenses, or by reaching additional modifications or extension agreements with the Senior Lenders.
The Company also notes, Without access to the funds provided for in the proposed cash collateral and DIP budget, the Debtors will be unable to continue with the orderly wind-down and liquidation process, including the Debtors proposed joint liquidating plan, which seeks to appoint a liquidating trustee to administer various assets to creditors as appropriate through a liquidating trust.
Read more medical bankruptcy news.
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Posted: at 6:46 am
Implant Sciences and the U.S. Trustee assigned to the case filed with the U.S. Bankruptcy Court separate objections to the official committee of equity security holders motion to retain D.F. King & Co. to provide plan solicitation services.
The Company asserts, Simply put, the retention of D.F. King & Co. is unnecessary and not in the best of the Debtors estates, shareholders or other parties in interest.Prior to this (self-created and purported) emergency filing, the Equity Committee made no effort to discuss with the Debtors either the necessity of D.F. Kings proposed retention, or the nature and scope of services it seeks to have D.F. King provide in light of the services that KCC, who is the Debtors previously engaged noticing and claims agent, would be providing in connection with solicitation of the Plan.
In addition, The Application lays bare the fallacy of the Equity Committees supposed concern for the administrative burn in these chapter 11 cases it proposes an entirely unnecessary and unreasonable expense to be borne by the Debtors estates and ultimately the common shareholders, which is fraught with the potential to create even more unnecessary costs in the future. The Debtors cannot agree to for the needless expenditure of estate resources for a superfluous, targeted campaign that, as demonstrated by the Equity Committees proposed Plan Support Letter, could potentially be rife with misstatements and mischaracterizations of fact, as well as unfounded, irresponsible personal attacks against the Debtors management team.
Read more bankruptcy news.
After five long years, San Bernardino is officially out of bankruptcy. What’s next? – Los Angeles Times
Posted: June 22, 2017 at 5:44 am
After five years that brought major changes to San Bernardino, the struggling city is officially out of bankruptcy.
The citys plan for emerging from bankruptcy which was approved earlier this year by U.S. Bankruptcy Judge Meredith Jury became effective June 15, officials said this week. The city, facing a $45-million budget shortfall, had declared bankruptcy in August 2012.
In the years-long process since, San Bernardino has seen its fire department and other services outsourced, its staff cut by hundreds and its public services neglected. Meanwhile, it has struggled to cope with increased violence that officials have attributed in part to an under-resourced police department.
Here are some things to know about the end of the bankruptcy process, what it means for the city and what might be next.
The citys plan of adjustment became effective June 15. That means the city can begin paying its creditors under the terms outlined in that plan, which was negotiated over several years.
Its details have been known for some time.
Most significantly, the plan preserves pension benefits for employees and retirees, though employees will have to contribute more to their pension plans, benefits were modified for new employees and retirees will lose some health benefits they were promised.
Some bondholders and unsecured creditors will be paid only 1% of what they were owed.
In a memorandum on the citys most recent proposed budget, City Manager Mark Scott put it this way: While the citys momentum has improved significantly, it would be overly optimistic to suggest that decades of decline can be reversed overnight.
The bankruptcy plan, Scott noted, is very realistic in showing only modest budgetary growth over a 20-year period.
The citys poverty rate is high about 33% of its residents live in poverty and its average household income is low, making it difficult for San Bernardino to generate the revenue it needs to pay for years of backlogged services.
But city officials say they are slowly making progress toward some of their goals.
The City Council is expected to approve a $160-million operating budget for the coming fiscal year at its meeting Wednesday evening, along with a $22.6-million capital improvement budget, which will help with street repairs, city park improvements and other much-needed projects.
The operating budget also allows for some additional staff in various departments.
San Bernardino has long been affected by high levels of violence, and last year it recorded its worst homicide rate in decades. So officials have focused on boosting the police department, which saw significant staffing cuts in recent years.
Under the citys proposed budget, about $76 million has been dedicated to funding the department up from about $70 million last year.
Were gearing up to have a police department thats better resourced, Scott said in an interview Wednesday.
The city is in the process of replacing about one-quarter of an aging fleet of police vehicles, Scott said. And it is hoping to fill a large number of vacant officer positions but that is no easy goal, given the time and resources it takes to recruit and train new police officers.
The departments resources have been boosted by a number of grants, including a federal grant announced late last year to offset the cost of hiring 11 officers.
The city is also in the process of implementing a new violence reduction program, and officials are in the late stages of recruiting someone to administer it, Scott said.
City officials would like people outside the city to see its potential rather than its troubles. They tout the the fact that it is home to Cal State San Bernardino and San Bernardino Valley Community College, its relatively low-cost housing and lower costs of doing business.
As the citys proposed budget this year stated:
Opportunities for first-time home buyers, entrepreneurs, investors and employers are vast; one only needs to see the potential.
But bankruptcy has cast a cloud over many of the citys aspirations. Now that its lifted, officials are hoping outsiders will take a new look at the city.
The thing Ive run into is that people have not understood how they are going to do business with a city in bankruptcy, Scott said. They ask, Will you keep your staff? Will you be able to follow through on your obligations?
Now, he said, were able to say to people, Were like any other city.
He added: Its time for us to show off that we can be a reliable place to do business. Its up to us now to perform.