And Madigan raised the specter of Flint, Mich., and noted the controversy over lead found in the citys water supply there as a result of a state oversight boards decision.

Cullerton, a key Emanuel ally, called the GOP legislation a ridiculous idea.

This is not going to happen. Its mean-spirited and evidence of their total lack of knowledge of the real problems facing Chicago Public Schools, Cullerton said.

The unfair treatment of pension systems by the state is the immediate cause of CPS financial problem. That situation ought to be addressed rather than promoting this far-fetched notion that the state is somehow in the position to take over Chicago schools, he said.

Cullerton was citing the mayors top complaint: City taxpayers pay for Chicago teacher pensions through property taxes while also paying for teacher pensions outside the city through state income taxes.

Escalating required contributions to the teachers pension fund are driving the Chicago Public Schools cash shortfall. In each of the past two years, pension contributions by CPS have topped $600 million, nearly triple what was required in previous years when the district was given state permission to make lower payments even as the retirement fund shortfall grew larger.

The increased CPS pension contributions, coupled with state reductions in payments to the fund, further strained an already tight budget. This year, the required contribution from CPS is $676 million. The state is paying about $12 million into the fund, compared with more than $62 million last year.

Forrest Claypool, who Emanuel appointed to serve as CPS chief executive, has argued the state should start contributing more to the Chicago Teachers Pension Fund. But critics note that for years CPS shortchanged the fund. For a decade under Daley, CPS made no payments to the fund, albeit with state permission.

Claypool called the GOP proposals a sideshow and a reckless smokescreen that distracted from the districts recent demands that lawmakers change how Illinois schools are funded and bail out CPS.

CPS is taking steps to fix everything within our fiscal control and keep as much money in our classrooms as we can, Claypool said in a statement.

CPS and the CTU leadership are working feverishly to reach a deal that would cut costs while preventing midyear layoffs, the district is going to market with $875 million in bonds and were on the verge of even deeper cuts to the bureaucracy, he said.

CTUs Sharkey and some Democrats also questioned the timing of Rauners criticism and the Republican legislation coming just before CPS goes to the bond market. The legislative proposals were announced as Fitch Ratings again downgraded the school districts debt this week.

Fitch cited a litany of factors, including CPS limited ability to raise revenue, difficult union negotiations and a lack of material progress in efforts to stitch up a yawning budget gap. Standard amp; Poors downgraded the districts debt by two notches last week.

CPS officials say the borrowing is crucial to keep the debt-laden system afloat, though market conditions mean CPS could pay a steep premium.

Mike Griffith, a school finance strategist with the Education Commission of the States, said school districts filing for bankruptcy is a rarity. By his count, only six school districts have filed for bankruptcy since 1954. The last one, which he said came in the early 1990s, was a tiny system in Missouri.

Griffith noted that a municipal bankruptcy is different than a personal bankruptcy because it would turn over to a federal judge the control of school district operations.

I think everyone looking at it definitely sees it as a last resort, because they could dramatically lower teacher pay. They could force you to close a lot of schools, to sell those buildings, to do many steps that people would be reluctant to do, he said.

The citys schools have been under the states emergency oversight before. In 1980, a district fiscal crisis that prompted banks to withhold loans from CPS prodded state lawmakers to create the Chicago School Finance Authority to supervise schools.

CPS had to submit a balanced budget to the authority, which had power to keep school doors closed until it approved or rejected district spending plans and contracts. That arrangement lasted until 1995, when a Republican-led legislature gave Daley the control of CPS that he wanted.

Tribune reporter Hal Dardick contributed.

In Australia, there is a lingering belief that bankruptcy should not be too easy.

The federal governments plan to reduce the period of bankruptcy from a minimum of three years to one year, announced in Decembers Innovation Statement, has been criticised for allowing debtors to avoid the consequences of their misconduct.

But this view misunderstands the role of bankruptcy law in a modern economy and arguably conflates the role of bankruptcy and criminal law. In fact, what is needed in addition to legal changes is a shift in the way Australians think about bankruptcy.

Modern personal bankruptcy law attempts to balance competing public interests of rehabilitating debtors and allowing them a fresh start, with the need to discourage reckless borrowing and spending and abuse of the credit and insolvency system.

But bankruptcy as a crime has had a long history, arising out of an early need to allay the violence and mayhem occurring through Roman debtors not paying their creditors, by imposing some order and authority on the warring parties.

This authority sought to divide up the debtors assets among the creditors; but the idea of protection of the unfortunate debtor did not arise until later. The first modern bankruptcy laws developed in the 16th century in England and sought to provide administrative order to commercial debt recovery.

Non-business bankruptcy was treated as a crime, with debtors prisons existing until the late 19th century. The growth of middle classes after the industrial revolution and the drive to encourage and broaden entrepreneurial risk taking helped change societys treatment of all bankrupts (both business and non-business) and the goal of protection and rehabilitation became more important.

At the same time, bankruptcy continues to involve the bankrupt losing most of their property, including the family home, and any cash, shares or other property, including their passport, and anything other than household furniture and a cheap car.

There are requirements to repay creditors through contributions from income, above a certain level; restrictions imposed on obtaining credit and with credit agencies reporting the bankruptcy; and restrictions on being a company director and on retaining licenses to work in certain trades and professions.

A failure of a bankrupt to comply with their obligations can result in the extension of their bankruptcy to five or even eight years. Failure to file a list of their assets and liabilities can result in the bankruptcy continuing indefinitely, at least until the bankrupt complies.

Most of these impacts are expected to remain whether bankruptcy is one year or longer.

Our 21st century laws even connect bankruptcy with serious crime, and treason, and impose criminal sanctions, including imprisonment, for breaches by bankrupts of many of these obligations. And there is still the stigma of bankruptcy, of being labelled as someone who could not manage their finances and left their creditors unpaid, and who otherwise might be seen as morally suspect.

The government doesnt propose to lessen these rules. Those who suggest that bankruptcy is an easy option are ignoring the range of penalties and limitations that apply to bankrupts. Given the fact that bankruptcy can release a debtor from debts of $20,000, or $20 million, the law – and society – acknowledges that some accountability and consequence be imposed. It is a matter of degree and of balance.

But the government has opted for a fresh approach to unpaid debt in personal insolvency, given it is a more emotive area than the relative anonymity of corporate losses.

Australia is seen internationally as having a rather harsh view of unpaid debt. But punishment and deterrence can only achieve so much when it comes to discouraging reckless borrowing or profligate spending.

A person might well not pursue their innovative business idea if the consequence of it not working were jail, or at a less extreme outcome, a long period of bankruptcy and the loss of most if not all of their property. Creditors also need a predictable, transparent and fair system for collecting their debts.

For that reason, many other countries are refocusing their insolvency laws more on rehabilitation and a constructive approach to business rescue.

The government is trying to shift the balance in favour of risk and innovation, with its potential for promoting economic growth, and to move the language away from retribution and failure, an important aspect of cultural change. But merely reducing the period of bankruptcy wont be enough.

The public narrative and perception around financial failure and insolvency, both personal and corporate, need to change if we are to embrace an entrepreneurial and innovative business culture.

Changing the law is perhaps the easier part, with initial public support needed, followed by a shift in public perception in order to allow the law to be fully effective.

The authors do not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond the academic appointment above.

Jason Harris, Associate Professor in corporate, commercial and insolvency law, University of Technology Sydney

Michael MurrayVisiting Fellow, QUT, Queensland University of Technology

This article was originally published on The Conversation. Read the original article.

It looks like 2016 is going to be the banner year for the leisure travel industry that I predicted in my column last April titled Pick a court position and play it. In other venues I offered my analysis of why we were going to see this boom.

Despite assurances of economists and politicians that the economy had recovered in 2009, the reality was that Middle America in general and millennials in particular were not participants. Continued high unemployment and underemployment created financial uncertainty even into 2015.

But a funny thing happened. The US became a major oil producer, and energy price volatility not only moderated, but prices dropped to seven-year lows in 2015 (actually hitting a 12-year low last week). Job growth reached healthy levels. Inflation was under control. People felt better about their economic future.

Some 10 years ago, I developed an algorithm that I believed could forecast client call volume and sales based on a variety of economic factors, including the unemployment rate, the prime interest rate, housing starts, home mortgage rates, the consumer confidence index, the personal bankruptcy rate and gasoline pump prices. I assigned a weight of 7 to the factor I deemed most important, a 1 to the least, meaning that a change in the most important was multiplied by seven, the least by one.

Unfortunately, applying the initial algorithm to year-old data to see how well it predicted observed six-month-old call volume yielded results that were little better than random dart tossing. Bummer.

But everything changed when I made gasoline prices the most important factor. I would love to tell you the results track with 99% accuracy. I cant. But I can tell you that in July my forecast was that we would grow our business in 2016 by 20%. Since we are sufficiently on track to realize that growth, were trying to add staff to handle the surge.

Why are pump prices so critical? As I write this, the average cost per gallon for unleaded regular in the US is just under $2, and thats skewed by higher prices in California and Hawaii. The price difference between now and a year ago means the average family with two wage-earners driving a car to work will have at least $1,100 more discretionary income to spend. Given that the average family spends $1,400 a year on vacations and they have been putting most of that in their collective gas tanks for the last seven years means that there will be millions returning to the vacation market.

Demand has surged. Our August 2015 bookings were the highest for the month in our history, exceeding those of January and nearly equaling February.

We already see cruise prices going up substantially for at least two of the contemporary brands, as well as firm pricing for premium, deluxe and luxury brands in many markets and itineraries. That price firmness is reflected in reduced — in some cases no — availability for prime categories on the most desirable itineraries in the time periods in greatest demand.

Not surprisingly, many retailers are beginning to hear complaints from clients that prices are high, prices arent going down as the sailing nears (as they had anticipated) and they arent getting the upgrades they have come to expect.

Lets try to put all that in perspective.

Yes, the days of the $349, seven-night cruise are gone. At least one can hope thats the case. A quick check of Caribbean seven-night rates for June 1 through Aug. 15 suggests an average rate for an inside stateroom to be (gasp!) nearly $1,000 per person, plus $100 or more in taxes and fees. And a balcony stateroom in that same time period will easily run $1,400 or more. That compares with a price on the then-new Majesty of the Seas of $1,050 per person, plus port charges of $50, in October 1993, which at the time was the lowest of low-season pricing.

In current dollars, that is equal to $1,806, while that actual low-season 2016 average for an inside stateroom is about $700. All of a sudden, the current average cost of about $1,100 for an inside stateroom in high season seems quite the bargain. And it is.

Anticipating responses, lets look at two Yes, buts.

Many cruises, especially in the contemporary segment, include much less today than they did in 1993. It was common then to offer lobster one evening at dinner, the cuts of beef were more varied and plentiful, and the number of selections at each course was greater. Freshly squeezed orange juice was available at no cost, as was 24-hour room service, and an espresso or cappuccino after dinner was complimentary.

While all that is true, taken in aggregate, all these items, including several alternative dining experiences, could be added to current cruise pricing and still not approach the inflation-adjusted cost of a 1993 cruise in comparable accommodations.  

So how can cruise lines present a product that offers most of the same things as two decades ago at such a low initial cost? Because onboard spend is up substantially. In fact, the total basket of money the average cruise passenger spends today, allowing for inflation, might not be greatly different because of the proliferation of onboard spending opportunities. A senior cruise executive told me some years ago that the average onboard expenditure on a seven-night cruise exceeded $800 per stateroom. I have every reason to believe that number is higher, perhaps substantially, today.

The $3 blackjack table is long since gone. Years ago, a cruise was considered a great value because drink prices were substantially less than at land-based resorts or even in local clubs. Today, bar prices equal that of many, if not most, mainstream establishments. Fresh-squeezed orange juice is available at a price. Specialty coffees may be purchased most any time of day from an onboard Starbucks or the equivalent.

In fact, take away onboard spending entirely for these and other items and most cruise lines would lose money. It isnt about the ticket price and hasnt been since about 1999. Its about onboard spending.

And its going to get better — or worse — depending on whether one is a cruise line executive/shareholder or a passenger.

Several cruise lines have announced recently that they will:

  • Begin charging (or increase the charge) for room service.
  • Change from fixed-price alternative dining to a la carte.
  • Begin charging to participate in onboard activities or partake in features.
  • Increase the daily recommended gratuity and/or change the gratuity from recommended to required.

Not surprisingly, these changes and others created a furor on consumer travel websites, the most common comment being that consumers were growing weary of being nickel-and-dimed and observing contemptuously that its become all about the money.

With all due respect, I dont know how to break it to those who posted that comment, but it has always been about the money.

Oh, and the other Yes, but?

Even some relatively small-volume agencies made 15% on cruise bookings in 1993. That meant they earned just over $300 on that low-season inside stateroom. Today, an agency with similar volume will likely make about $130 selling that same stateroom. 

Its like this: More than a few suppliers offer products that have no noncommissionable fees. Others offer value-included packages that let the retail professional benefit by offering all or mostly inclusive packages over the base fare with a subsequent jump in commission. Todays travel professional has to do a better job of:

  • Explaining to clients the facts of life about supply and demand and why booking now makes sense rather than waiting.
  • Bringing value to the process by being bold enough to determine the prospects total planned vacation budget and using that information responsibly.
  • Outlining to the prospects how much they will really spend on the cruise they are considering.
  • Offering products from suppliers that provide the best overall value to the client, not just the best deal with the cheapest up-front base fare.
  • Selling those suppliers that have supported retailers historically, not just recently when they became desperate.

By Carolina Bolado

Law360, Miami (January 20, 2016, 8:48 PM ET) — A Florida bankruptcy judge found a Palm Beach attorney in contempt of court and ordered her arrested for failing to present accounting records for a client trust account and for skipping out on a show cause hearing on Tuesday.

US Bankruptcy Judge John K. Olson ordered attorney Tina Talarchyk arrested after she failed to show up at a hearing to show cause why sanctions should not be imposed after she failed to produce accounting records for the trust in a personal bankruptcy case.

Talarchyks blatant refusal…

Donald Trump says he gets things done that mere mortals cant. This claim has propelled his campaign for the GOP presidential nominationmuch to his critics alarmas well as his books and a successful television show. But a Washington Post investigation reveals that when the mogul sold this message to New Jersey gambling regulators more than two decades ago, he overstated his resourcesand a lot of people paid a very high price.

If you write this one, Trump told the Post. Im suing you.

As the Post reports, in the late 80s, Trump was angling to buy his third casino in Atlantic City, New Jersey. His choice was the unfinished Taj Mahal, which was poised to become the biggest casino-hotel complex in the world. But to close the deal, Trump had to persuade state gambling regulators that he could get the financing to finish construction.

At a hearing in 1988, Trump assured regulators that his reputation would secure him the necessary financing. In particular, he said he could get loans at prime ratesthe interest rate that commercial banks offer their most trusted customersrather than so-called junk bonds.

I can use my own funds or I can use regular bank borrowings, so I can build at the prime rate,Trump said, according totranscripts obtained by the Post. I mean, the banks call me all the time. Can we loan you money? Can we do this? Can we do that?

Trump continued with a line that could be straight out of one of his campaign speeches: I get it done, and everybody is happy, and it turns out successfully.

But he did not get it done, andeverybody was not happy. Whiletheregulators approved Trumps casino license,the promised prime-rate loans never materialized, and Trump turned to the very junk bonds he had disparaged.He agreed to pay the bond lenders 14 percent interest, roughly 50 percent more than he projected, to raise $675 million. It was the biggest gamble of his career,Post reporter Robert OHarrow Jr. wrote.

In April 1990, the Taj Mahal opened its doors in an over-the-top extravaganza attended byMichael Jackson. By March 1991, Trump was falling behind on payments for $1.1 billion in loans across his business empire. A few months later, the Taj Mahal filed for bankruptcy. While large institutional lenderssuffered the worst hit, minor investors who had bought the bonds and small-business owners who had done business with Trumps casinoslost big, too, according to the Post.

As for the person at the center of the collapse, in an interview with the Post Trump denied that the Taj Mahals bankruptcy had any impact on his personal wealth. (Trump has never filed for personal bankruptcy.) But the Posts findings indicate the contrary. Trump had full ownership of the Taj Mahal, the newspaper found, and after its fall, thebusinessman relinquished half his stake in three casinos and sold his 282-foot Trump Princess yacht, among other assets. The Post also found that Trump may have exaggerated his personal wealth: The mogul said in 1990 that he was worth $1.4 billion, but Forbes estimated he was worth $500 million. The state casino commission estimated in 1991 that, after liabilities, Trump was worth just $206 million.

True to form, Trump continues to paint the deal as just one more triumph. The Taj Mahal was a very successful job for me,he told the Post. I got out great.

When Trump#x2019;s company purchased the Deutsche Bank loan, that put the presidential candidate in a position to foreclose on the property and potentially ignore his son#x2019;s personal liability. The company, Titan Atlas Manufacturing, was a specialty construction products firm that operated for barely two years and shut down in 2012, leaving a trail of litigation, unpaid bills and unpaid taxes.

For a brief time, the Pace Street property was leased to a company with a similar name, Titan Atlas Global, but that company also failed.

In addition to Donald Trump Jr., Titan Atlas#x2019; founding investors were Washington state farmer Lee Eickmeyer and Mount Pleasant resident Jeremy Blackburn, who was also CEO of Titan Atlas Global. Each of the three men personally guaranteed a $3.65 million Titan Atlas Manufacturing loan from Deutsche Bank #x2014; the loan that the elder Trump#x2019;s company later purchased #x2014; allowing the bank to pursue the three men together or individually if it were not repaid.

Eickmeyer also personally loaned $950,000 to the company. In August, with his claim in jeopardy, his attorneys alleged in court filings that Donald Trump#x2019;s company #x201c;engaged in unfair trade practices#x201d; and #x201c;purposefully caused the borrower to default,#x201d; but Eickmeyer#x2019;s claims were later settled prior to the foreclosure.

Repeated efforts to reach Eickmeyer for comment have been unsuccessful. Attempts to reach representatives of Trump#x2019;s company through the lawyer who attended the foreclosure sale were also unsuccessful Tuesday.

Blackburn, the third co-founder and loan guarantor, declared personal bankruptcy in 2013, wiping away his debts and liabilities.

Both Blackburn and Donald Trump Jr. are currently involved with a plan to redevelop the former Charleston Naval Hospital in North Charleston, with Charleston County government as the anchor tenant.

On Tuesday morning in the county Judicial Center, Trump#x2019;s company was the only bidder in a foreclosure sale of the Titan Atlas property. The auction gave D B Pace Acquisition control of the property and left other creditors #x2014; including the state and federal government #x2014; with nothing. Titan Atlas had failed to pay nearly $115,000 in South Carolina sales tax, workers#x2019; compensation tax and federal taxes, according to claims made in court filings.

D B Pace used the debt it was owed as credit during Tuesday#x2019;s auction, so no money changed hands at the foreclosure sale.

Reach David Slade at 843-937-5552 or