Monthly Archives: December 2014

Boy-Band Bankruptcy: How Dwindling Fame and Poor Investments Left These Boy Bands Broke

Bankruptcy law
Rapper Notorious B.I.G. hit the nail on the head when he wrote “Mo Money Mo Problems.”

The late 90s and early 2000s were the height of boy-band mania, allowing these pop music groups to amass wealth seemingly overnight. However, while the music industry can be quite lucrative once you’ve “made it,” the industry giveth and taketh away fame and fortune in the blink of an eye.

Nearly a decade and a half into the new millennium, and boy bands’ popularity has all but worn off. Former pop sensations such as the Backstreet Boys, Blue, and Westlife can all boast record-breaking album sales, but they also each have at least one member who has gone broke.

Squandering a multi-million dollar fortune may seem like a highly irresponsible — if not impossible — feat, but going broke is easier than you might think. A look into these pop stars’ finances reveals a history of poor investments, hefty tax bills, and difficulties coping when the money well dries up. In fact, bankruptcy is no stranger to the music industry. Considering the large number of high-profile pop star bankruptcies, it seems the two almost go hand in hand.

Perhaps one of the most notorious examples of boy-band bankruptcy is that of English RandB group Blue. The rapid succession of bankruptcy among Blue’s former members, including Antony Costa, Duncan James and Simon Webbe, shows how easy it is to go from boom to bust in just 12 years. Only one former band member, Lee Ryan, avoided bankruptcy.

The group amassed over $125 million USD as the UK’s favorite boy-next-door group, but lost most of their earnings to reckless spending and debt. Duncan James, 36, filed for bankruptcy in September 2013 after investing in homes for his ex-partner, daughter, and parents. Antony Costa, 33, filed for bankruptcy after claiming he couldn’t afford his lavish lifestyle after the group split in 2004.

The band’s company, Blueworld Limited, also filed for bankruptcy once it became painfully clear the company was unable to pay their investors and creditors back. Unfortunately, the timing of Blueworld Limited’s bankruptcy filing coincided with their sold-out European tour in 2013.

Though pop singers and celebrities who file for bankruptcy usually get a bad rap, bankruptcy helps many everyday Joes and Jills turn over a new financial leaf. Not all bankruptcies are created equal, and not all debts are automatically discharged. For example, Chapter 11 bankruptcy allows the filer to re-organize their debt and create a court-approved repayment plan for a predetermined amount.

Restaurant Voluntarily Relinquishes Michelin Star

michelin-restaurant-star-spanish.si

To have a Michelin star is to be a big deal. A really big deal. When the New York city restaurant of celebrity chef Gordon Ramsay lost its Michelin stars, he cried, and said losing them was like losing a girlfriend.

Why, then, would any self-respecting restaurant want to voluntarily give up its Michelin star?

According to Julio Biosca, it’s because maintaining Michelin star standards is just too much.

Biosca, the fourth-generation owner of Michelin -starred restaurant Casa Julio, announced earlier this month that though he still very much respects the Michelin guide’s work, the restaurant will be renouncing its star to save money after being in the prestigious culinary guide for so many years.

“The inspectors work really well… It is because of the respect that I have for the guide that I preferred to leave it,” said Biosca.

It’s not the publication — it’s the culture generated by the Michelin star, Biosca went on to explain, saying “When everyone is telling you you’re the best, when you don’t get your second Michelin star, you’re pissed off.”

Casa Julio, a restaurant in a small Spanish town on the border between Valencia and Alicante, was founded in the 1940s, but didn’t get a Michelin star until the mid-2000s. Everything changed when it earned the illustrious award, though. Rather than offering dishes like enchiladas and arroz con pollo — two of the most popular Hispanic foods — Casa Julio offered Mediterranean cuisine. After it earned the award, its menu shied away from the Mediterranean dishes.

Worse, its portions shrank, and its prices soared — none of which locals exactly appreciated.

Realizing that the best course of action was to return to the way things were before, Biosca tried to relinquish the Michelin star back in 2013, but found his restaurant featured in the 2014 edition. He was only able to renounce it for 2015.

Casa Julio is not the first restaurant to sacrifice its prestigious award, either. In fact, experts agree that a Michelin star often means more loss than profit. Pascal Remy, a former Michelin Guides inspector, said that whoever receives the distinction “will need more money.” He added that everything earned from new clients gets reinvested.

Though some, like Gordon Ramsey feel like they’re losing a piece of themselves when they lose their Michelin stars, others are happy to see them go, and for good reason.

Latest and Largest Hack Aims to Game the Stock Market

woman uses a smartphone
The last few months have sparked a national awareness of cybersecurity — or rather, the lack of it. From the celebrity nude leaks in September of this year, to seemingly rampant credit card hacks targeted at major retailers, people are becoming more and more aware that the internet is not the safest place for information. The latest hack, which is already being called one of the biggest, was revealed on Monday and was for the purpose of gaming the stock market.

According to Reuters, cybersecurity firm FireEye has uncovered a hacking operation that has apparently been active since as early as mid-2013. The operation targeted and hacked emails from more than 100 different companies, mostly healthcare and pharmaceutical companies.

The hackers stole sensitive corporate information from publicly held companies, presumably for the purpose of gaming the stock market, since the information gathered would allow someone to make profitable trades before the insider information was made public. About 47% of Americans are invested in the stock market.

“They are pursuing sensitive information that would give them privileged insight into stock market dynamics,” FireEye Threat Intelligence Manager Jen Weedon said.

According to The Washington Post, the hacking group has been dubbed “FIN4” by FireEye, since it is the fourth major financially motivated hacking groups that the firm tracks.

Rather than using malware, the sophisticated hacking scheme hacks email login and password information, and in turn uses this to send phishing emails to other members of a company.

Though major hacking operations are usually thought to be from China, FireEye suspects that FIN4 is either from America or Western Europe and that the masterminds behind it were trained in investment banking, based on evidence from the phishing emails.

It is unclear whether or not the stolen information was used for trading, and the identities of the hackers are unknown.

Property Management Firm Gives Arizona Neighborhood New Life

Street of residential houses
For years, Maricopa Meadows was an eyesore: the grass was brown, poor drainage drew clouds of mosquitos, and the housing crash had caused a number of foreclosed, empty homes. The homeowners who remained worried that sulfates in the soil would wreck havoc on their foundations, while the local homeowners association lacked money to make any changes in the community. Now, however, Maricopa Meadows is a lush lakeside neighborhood in the Arizona desert, boasting 44 acres of healthy, green grass and over 1,600 homes. But what could have caused the area’s sudden change in fortunes? Residents thank the new property management company, who have given Maricopa Meadows a new lease on life.

In early October, Associa Arizona, a company based in Tempe, took over Maricopa Meadows, making it their first venture in the Maricopa area. Previously managed by FirstService Residential, Associa Arizona quickly hired a landscaping company to begin maintaining public areas and also instituted a number of other changes. While they have held the position for less than a month, they have launched a new and improved website, created an online voting system for community meetings, and started a new onboarding process to match community managers with residents. Additionally, Associa Arizona has added shade covers and LED lighting to playground areas, installed Pickleball and basketball courts, cut down on water usage and converted several acres of grass into desert to help preserve the community’s block walls.

Many of these changes were made possible through the efforts of the community’s HOA board members. One of an estimated 325,203 homeowners associations located in the United States, Maricopa Meadows’ HOA was able to save up money during their rough periods, allowing them to eventually hire an effective property management company to implement necessary and beneficial changes. And it appears to be paying off: already, real estate agents have noted that home buyers are more interested in moving to the area.

Maricopa Meadows isn’t for everyone, especially because the neighborhood is located some distance from the city center. However, many homeowners enjoy living in a community with an elementary, middle and high school nearby. A recreational complex and movie theater were recently built near the neighborhood as well. With these changes, it seems likely that the community will thrive. But they may not be the only ones: Associa Arizona was recently selected to manage the Felty Farms Homeowners Association in Gilbert, as well.

Minnesota Moves Forward With Medical Marijuana Legislation

Marijuana
On Monday, Dec. 1, the Minnesota Department of Health made a key step on its journey toward medical marijuana legalization by announcing the two companies that will manufacture the state’s medical marijuana supply.

Department of Health officials finally chose Minnesota Medical Solutions and LeafLine Labs to take on the role — the companies will be responsible for growing medical marijuana and processing it into pill, vapor or liquid form for patients, the Daily Journal reports.

According to a KSTP-TV article, 29 interested parties were narrowed down to 12 applicants for the role of manufacturing the state’s medical marijuana, each of whom had to pay a nonrefundable $20,000 application fee to be considered.

Once Minnesota has fully legalized medicinal marijuana for its residents, it will be the 24th state along with the District of Columbia to allow medical marijuana. KSTP-TV reports that the state will begin distributing medical marijuana to patients on July 1, 2015.

Studies have revealed numerous ailments that using medicinal marijuana can treat. From alleviating chemotherapy side effects to fighting epilepsy, many people seek out medical marijuana as an effective form of treatment that doesn’t involve the side effects of prescription drugs.

Medical marijuana won’t just provide numerous health benefits to Minnesota residents who qualify for a prescription — its presence in the Land of 10,000 Lakes will also act as an economic boon in Cottage Grove and Otsego, where Leafline Labs and Minnesota Medical Solutions are respectively located. Cottage Grove alone expects about 50 high-paying jobs to be added to the local economy, according to KSTP-TV.

“It is a big game changer, so we’re pretty excited to be on the cutting edge,” Cottage Grove Mayor Myron Bailey told KSTP-TV. “It’ll be a nice gift for the city of Cottage Grove and its residents with taxes and its new jobs.”