Category: Money Makes Sense

Radioshack files for bankruptcy for the second time

Radioshack, the popular electronics retailer is all set to close 187 stores in this month as it files for bankruptcy for the second time in just two years. This time, the retailer is closing up 9% of its total of 1,943 stores after it becomes unable to manage the debts.

One of the greatest electronics chains has its origin in Fort Worth, Texas. In 2015, Radioshack filed for bankruptcy for the first time and it closed about 2400 stores. General Wireless, the joint venture of Sprint and Standard General acquired Radioshack and it took control of 1,518 stores. General Wireless filed for Chapter 11 bankruptcy in Delaware stating that it is closing down 187 stores. In addition to these, Radioshack also plans to close 360 stores that are shared by Sprint. The company is also evaluating about the future of the remaining 971 shared stores.

This move affects 1850 employees of the 5000 employed by the company. Sprint purchased the 115 store leases from General Wireless, paying $12 million. Sprint also became the primary tenant for 245 more stores owning furniture and equipment. On March 13th, the stores apart from those closing down will continue to operate, but the company is using other options during the bankruptcy process. online portal is launched to encourage clearance sale of the goods.

Radioshack has a long history of 96 years as the company began selling radios and other equipment since 1921. For all sorts of electrical and electronic products such as mobile phones, loudspeakers, satellite TVs, toys and batteries, Radioshack became the one-stop shop. Radioshack gained immense popularity as it sold the first fully assembled TRS-80 PC running an operating system developed by Bill Gates. Bill Gates later went on to become the founder of Microsoft and emerged as the legend that he is today. In 2013, Radioshack became the eighth biggest consumer electronics dealer.

However, the sales volume declined for Radioshack as the company reported that it had to endure a loss of $200 million in mobility business. The company went on to file for bankruptcy for the first time, closing about 200 stores. Dene Rogers, CEO and President of Radioshack acknowledged and appreciated the efforts of his staff who were working hard to inject new life into the brand. In early 2015, Radioshack agreed to set up Sprint Team at Radioshack co-branded stores hoping that it would boost the sales. By the end of 2016, the revenue for Sprint had dropped and apparently, Radioshack couldn’t generate mobile commissions as expected. Radioshack has plans to redeploy Sprint’s assets to other stores that will continue to operate.

The Sprint employees currently working at Radioshack stores that are scheduled to be closed will be given opportunities to transition to the other Sprint partnership stores. The retailer now focuses on emphasizing on the Sprint brand. Radioshack hopes that the second bankruptcy would give it a chance to find out whether it can run a sustainable business henceforth. According to the bankruptcy filing, Radioshack has trade debt of $62.9 million, $65.2 million of liens, and $10.2 million of unpaid rent.

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EPA environmental justice leader resigns when Trump cuts budget

President Donald Trump is keen on increasing infrastructure and military spending. To generate funds for these programs, the White House has planned budget cuts for several federal agencies and the Environmental Protection Agency is one of those. Mustafa Ali, an important Environment Justice leader offers his resignation after about two decades of service to the EPA.

Mustafa Ali is a senior adviser for EPA and he also founded the Environmental Justice office during the early 1990s. Through his dedicated efforts, he became an important adviser and he has served in the office for more than twenty years under both Republican and Democratic presidents earlier. The White House was planning on closing down the Environmental Justice office as an integral part of budget cuts. In the budget proposal, the Trump’s team plans on reducing 25% of the budget allocated to EPA and it will result in trimming 20% of the workforce. Justifying the plan to close Environmental Justice office, the White House commented that it would continue to support the idea through Office of Policy. Mustafa Ali’s resignation comes in during this critical time.

During an interview, Ali commented that he wants to depart the agency at this time because he can’t stand and witness the efforts of numerous environmental activities rolled back by the new White House administration. He expressed his sadness that the positive steps were taken by previous administrations and the new policy would affect numerous communities.

Ali cautiously commented that every new administration has its own priorities. However, Trump era doesn’t promise a positive relationship with vulnerable communities that are filled with environmental concerns. Ali has strongly urged the administrator of the agency to rethink before cutting down on EPA programs that are developed to help disadvantaged communities.

The White House administration has planned to cut down several programs like Collaborative Problem Solving, EJ Small grants, and many others. Ali was concerned that the administration is taking decisions without having a conversation with those who are in dire need of the help. He wants the agency to lend an ear to the concerns of the disadvantaged communities and understand that their lives matter.

Scott Pruitt, the EPA’s administrator has not gained the trust of Environmental Justice leaders. The agency was sued repeatedly as the efforts to control pollution often exceeded the legal authority. Pruitt is criticized as his political campaigns were regularly funded by various oil and gas companies. The Republican Attorneys General Association was led by Pruitt and it was also funded by Murray Energy, ExxonMobil, and various other firms. After becoming a part of EPA last month, he has effectively reversed various regulations imposed by the Obama White House. Pruitt was seen addressing the audience that the future of EPA is going to be different and Mustafa Ali doesn’t want to be a part of such a future. Ali was worried that there is too much at stake to allow for rollbacks.

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Uber uses disruptive strategies that lead to bad reputation

Uber, one of the most popular taxi-hailing services has been facing criticism ever since its launch. The year 2017, in particular, has not been kind to Uber so far. The taxi service company has been in the news for all the wrong reasons. Uber has been accused of disrupting the rules and regulations of several states within the US and outside the country. The company which was started in 2009 gained popularity and became the highly valued private company appraised at $70 billion. The company has faced several controversies.

The newest controversy surrounding Uber is its program called as Greyball. This program was designed with the sole aim of preventing authorities and officials from hailing rides in various cities that are not friendly with Uber’s operations. Even though Uber is highly sought after, the company faces problems in various cities regarding the regulations. In controversial cities, Uber uses the Greyball program to dodge the security officials who may have a problem with Uber.

Mitch Kapor, one of the early backers of Uber has published an open letter along with his wife criticizing Uber’s destructive work practices. The company was accused of following aggressive business practices without any regard for the business rules and regulations.

Uber suffered from the wrath of people boycotting the service when it seemingly tried to profit from taxi strike in the New York city after Trump issued immigration order banning people from certain countries. Following the massive bad publicity, the CEO of Uber, Travis Kalanick resigned from the advising council of the President. Waymo filed a lawsuit against Uber for stealing its self-driving car technology. Uber was also bashed for blatant sexism.

Recently, a video surfaced showing Kalanick hurling abuses towards his Uber taxi driver. This came out at a time when Uber claimed that it has a strong support system for its drivers. Following the media attention towards the video, the CEO promptly apologize for his behavior.

Greyball emerges to be the biggest scandal concerning Uber because it prevented regulating authorities from hailing a cab service by tracking their details in various ways. The credit cards, user behavior, and even social media profiles were monitored to determine whether the new customer is an official related to the police credit bureaus. In order to thwart these officials, Uber uses a fake app with ghost cars making the officials believe that no car is available for their ride.

Following the exposure of Greyball, Joe Sullivan, the Chief Security Officer of Uber has announced that Greyball won’t be used anymore. He said that use of Greyball is strictly prohibited and it will take some time for their system to reflect the recent update. However, this means that Greyball was in use for a long time and Uber can exclude any people they want based on their own privileges. Many people question whether it is ethical or illegal and experts agree that it is a grey area. The companies require technology to provide best services for its customers and there are no regulations to prevent these companies from using the same technology against the public service.

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Trump Taj Mahal closes shop after 26 years

Trump Taj Mahal

The Trump Taj Mahal, a popular casino hotel in Atlantic City, has closed its doors 26 years after it was opened by Republican U.S. presidential candidate Donald Trump, following years of losses.

The closure, which was announced by owner Carl Icahn on Monday, had been widely expected. The casino hotel’s management had announced in August that it would close the business amid labor and profitability challenges.

The shutdown increased to five the number of casinos that have gone out of business in Atlantic City, as it becomes less and less popular as a gaming, resort destination.

The casino hotel’s billionaire owner said in a statement that the business lost nearly $350 million in “just a few short years.” It wasn’t only the losses that brought the Trump Taj Mahal to its somewhat sudden demise, though. A breakdown in negotiations with union workers also contributed to the closure, which will cost about 3,000 employees their jobs.

The workers’ union called about 1,000 employees at the hotel out on a strike on July 1. It was fighting for healthcare and pension benefits for the workers, who included bartenders, cooks, and housekeepers. The last offer made to the union by Icahn reportedly included medical benefits, but it was rejected.

This left the billionaire investor friend of Trump with no other option than to close the Taj Mahal. He said keeping the casino open would have required more investments and result to more than $100 million in losses over the coming year.

The benefits requested by the union workers were reportedly removed in bankruptcy court.

The famous casino hotel was opened by Trump in 1990 after years of legal and financial issues and heavy debt financing. Covering more than 100,000 square feet, the Taj Mahal dubbed itself the “eighth wonder of the world.” It ranked among the world’s largest casinos at the time it was opened.

The Taj has been the subject of multiple bankruptcy filings since then. Trump lost ownership of the hotel in 2009 following the bankruptcy restructuring of his Trump Entertainment Resorts. The control of the operator company was taken over by Avenue Capital.

The restructured Trump Entertainment Resorts again filed for another bankruptcy protection in 2014. It became an Icahn Enterprises subsidiary after the legal proceedings were completed.

In August, Chief Executive Tony Rodio of Tropicana Entertainment Inc., the company which controls the Trump Taj Mahal on behalf of Icahn Enterprises, revealed in August that its billionaire owner had lost approximately $100 million since its acquisition after conclusion of bankruptcy proceedings in February.

The workers’ union had argued that many of the hotel’s workers saw “only 80 cents per hour in total raises” in the past 12 years, even when cost of living in the Atlantic City area rose by over 25 percent in that period.

The union said squabbles over labor issues between Icahn and the workers had cost the Taj Mahal around $150 million.

Atlantic City has witnessed strong out-of-state challenge to its reputation as a major East Coast gaming center. Deteriorating infrastructure has also not helped its fortunes. Trump Plaza Hotel, Revel, Snowboat Casino Hotel, and the Atlantic Club are some of the casinos that have closed shops here since 2014.

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Claimed major discovery to significantly boost Alaska oil output

Alaska oil

Known oil reserves in Alaska appear to have experienced a highly significant expansion following a claim by an exploration company that it has made a discovery that would rank among the largest in the history of the state.

Caelus Energy LLC disclosed on Tuesday that it has discovered around six billion barrels in an offshore Arctic location. This estimated figure, if confirmed, means a significant boost to Alaska, a state which has experienced a considerable slump in its oil output over the years.

“This discovery could be really exciting for the state of Alaska,” said Caelus CEO Jim Musselman in a release. “It has the size and scale to play a meaningful role in sustaining the Alaskan oil business over the next three or four decades.”

The discovery was reportedly made in the shallow waters of Smith Bay, between Barrow and Prudhoe Bay along the Arctic shore.

Caelus stated that the “light, highly mobile oil” reserves have the capacity to generate 200,000 barrels per day. This is a very impressive figure when compared to the overall state oil output of 483,000 per day. It looks to make the field more productive than the Alpine or Colville River field of ConocoPhillips which started production in 2000, with output peaking at 139,000 barrels per day in 2007.

The statement from the Dallas-based company revealed that up to 2.4 million barrels of the estimated total reserves are recoverable. The figure compares very well with Alaska’s 2.86 billion barrels in proved oil reserves as of 2014.

These estimates are numbers generated by the company, according to a spokesperson. There is no mention of a third-party analysis by another engineering firm.

If fully confirmed, this find looks to lift the Alaskan economy significantly. The state has experienced a significant dip in oil output from peak production level of more than two million barrels per day in 1988 to the current 483,000 barrels, according to Energy Department data.

Caelus revealed that the discovery was made after collection of seismic data and drilling of two wells early this year. Quoting a company spokesman, Bloomberg reports Caelus has plans to drill another well in early 2018.

Light oil, such as discovered by Caelus, flow more like water. This makes their production less cumbersome than that of heavy oil.

The company the new discovery would be the biggest in the state in four decade. Alaska’s biggest oil field Prudhoe Bay was discovered back in 1967.

In spite of the potential the discovery seems to hold, David Houseknecht has cautioned that it might be a little too early to get too optimistic. The project chief for the USGS Energy Resources Program of Alaska said more testing needed to be done.

Houseknecht cited the case of the Kuvlum field discovered by ConocoPhillips predecessor ARCO Alaska in the proximity of the Arctic National Wildlife Refuge. It was believed to be holding one billion barrels in oil reserves, but it ended up not been developed.

It is expected to take between five and 10 years before oil can flow, if the field is developed.

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When consumers have incentive to save they will borrow less


When consumers are incentivized to save, they will save more. When they save more, they use fewer payday loans. This is the conclusion made by the Consumer Financial Protection Bureau (CFPB).

The CFPB, releasing its latest results in the Project Catalyst research project, discovered that when you both ask and offer incentives customers to allocate some of their money into a savings “wallet” then they will do so. As they continued to utilize the savings wallet, they saved more and used far less payday loans.

According to the CFPB, when customers were not asked and incentivized to take advantage of the so-called savings wallet then they did not save more and they continued to use more payday loans.

“This Project Catalyst research shows that encouraging and enabling users of prepaid cards to set aside funds can help people reach their short-term financial goals,” said CFPB Director Richard Cordray in a statement. “Importantly, it also shows that consumers who are encouraged to save can reduce their use of payday loans.”

The CFPB maintained the project for three months and tracked the users for an additional nine months. The researchers found that maximum savings had peaked at $150. After nine months, the savings had steadied at around $100.

CFPB study authors presented the idea that consumers, despite their income levels, want to save more. When they are given the option to save a portion of their income then they will do so, which is positive news.

Researchers noted that this can be a common problem for low-income households. Since impoverished consumers do not have a savings account, they regularly use the funds in their checking account or they borrow funds from short-term, high-interest loan stores. These funds will be tapped to cover common expenses or to pay for an unforeseen event.

The CFPB believes that if consumers have a savings account then they can better attain their pecuniary objectives. Without one, the CFPB notes, they won’t be able to get very far in their monetary aims.

The CFPB’s research is actually required by the Dodd-Frank Wall Street Reform and Consumer Protection Act. Since its inception, the CFPB has launched an array of initiatives to provide consumers financial education and help individuals meet their ultimate savings goals.

Over the last couple of years, the CFPB has also been active in reining in the payday loan industry. The federal consumer watchdog agency believes that payday loans tend to negatively impact the impecunious households and neighborhoods across the United States.

This past spring, the CFPB unleashed the nation’s very first federal regulatory framework for the payday loan industry. Proponents of the payday loan industry purport that these regulations go too far, while payday loan critics argue that the new rules don’t go far enough. Members of Congress are trying to derail the proposal, while others are trying to get it to the desk of President Obama to sign and enact.

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Ways to determine an IRS call is fake

Warning Of Scam

The IRS recently announced that it has hired four debt-collection firms to search American households for IRS bills. The agency said that the contractors will concentrate on overdue accounts that it does not have the time or manpower to pursue. However, that being said, taxpayers can still mistake legitimate calls for a tax-collection scam.

That is not hard to imagine as the IRS has already experienced a 400% increase in schemes that have to do with phishing. In March, the Treasury Inspector General, who manages IRS activities, stated that its office received over one million reports of telephone scams involving fake tax collection during a period beginning in October 2013. About 5,500 people have lost, in total, $29 million.

Clues that Indicate A “Debt Collector” is Not with the IRS

Following are some clues that an IRS call is a scam:

  1. You didn’t receive a letter

Under the new program for tax collection, the IRS is supposed to mail a written notice that it is going to turn your account over to a collection agency. Then, one of the agency’s four collection agencies will send a letter to you verifying the transfer. That agency is the only agency that should be calling you.

  1. The caller asks you pay the agency for collection

Contracted agencies are not permitted to accept payments on behalf of the IRS. They also are not allowed to ask for a remittance on a prepaid debit card. Instead, they should refer you to for electronic payment options. Checks, on the other hand, should be made payable to the U.S. Treasury and sent to the IRS itself.

  1. You already have initiated repayment

The IRS will not assign your account to a private collector if you already have an installment agreement with them.

  1. The caller does not care that you are deployed or living in a disaster area

The IRS does not turn over past due accounts of taxpayers who are living in Presidentially declared disaster locations or who are deployed in combat zones. However, that does not mean you still don’t owe taxes. You just have to deal with the payment at a later date.

  1. The caller wants a payment from a deceased person or minor

People who are deceased or under 18 years of age may show outstanding debts. However, according to the IRS, these accounts will not be referred to private collection agencies.

  1. The caller does not care that you are already working with the IRS on a specific problem

Private collection agencies working for the IRS are not allowed to handle tax-related cases involving identity theft, examinations, litigation, levies, criminal investigations, and similar circumstances.

  1. The caller is unprofessional and rude

Private collection agencies must abide by the Fair Debt Collection Practices Act. That means they cannot threaten you or show any type of unprofessional behavior.

So, if you have a current tax bill, beware. Be wary of any so-called collection agency that behaves in an unprofessional manner, or who exhibits one of the aforementioned behaviors.

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