Lawyers for Inland Bank forced court to move 70 year Lloyd Hughes and his 50 year old laundry business into Chapter 7 BK liquidation instead of modifying his loan or reinstating his Chapter 11 BK reorganization plan.
He lost his Chapter 11 status for “innocently” paying a repair bill directly without pre-approval of the Bankruptcy court. He could not get it reinstated in time before Inland lawyers pounced and demanded liquidation – to which Judge A. Benjamin Goldgar was delighted to accommodate. Read what the judge said below and if that doesn’t frost your balls, what will?
You have to read this to believe it! – There is no mercy or morals in our courts anymore.
Even when you try to do things right, the Banks want “blood” (the green kind) RIGHT NOW and nothing else will do. This is one of the most abhorrent exhibits of judicial arrogance and attorney/banker immorality I can remember.
These foreclosure mill attorneys must be stopped – and the judges that support them must be removed.
Re-blogged from Chicago Sun-Times
The laundromat at 63rd and King Drive might not look like much to a passerby, but it has been Lloyd Hughes’ life work of 50 years, his pride and joy.
That made it only that much more painful when a federal bankruptcy court judge took it away from him.
“I’d like to jump out that window,” Hughes told me moments later outside the sixth-floor courtroom at the Dirksen Federal Building where his world had come tumbling down.
Hughes was just 20 years old in 1967 when he bought an old, brick auto-repair garage and opened the laundromat there with a small loan and some help from his parents, owners of a nearby nightclub.
He learned how to repair the machines himself, how to keep the riffraff from hanging out on his sidewalk and how to manage lots and lots of coins.
What Hughes started as the Woodlawn COIN-OP Cleaners and Laundry is now Laundryworld, with 155 state-of-the-art washers and dryers. He was a rare survivor among African-American owned businesses of that era.
Bankruptcy Judge A. Benjamin Goldgar.
On Wednesday, though, the 70-year-old Hughes could only stand by helplessly as U.S. Bankruptcy Judge A. Benjamin Goldgar ordered his business placed in Chapter 7 bankruptcy for liquidation.
Hughes seemed to go into shock.
“Your honor, may I say something?” he asked after the judge and lawyers had their say. “Your order literally means I’m out of business.”
“I think that’s been true for some time, sir,” Goldgar said. “I’ve got a bank that hasn’t been paid.”
Yet even as the judge spoke, Hughes’ laundry was still open for business and serving neighborhood residents as it has daily for 50 years, a tidy, well-maintained business in a struggling South Side community.
Just across the street is the Parkway Gardens housing development. Among the shuttered businesses on the block are a McDonald’s and Walgreen’s — a measure of the challenges at that location. Now: one more casualty.
“The neighborhood is really going to suffer,” Hughes tried telling the judge, invoking his African-American clientele and his own status as a longtime black businessman.
“This has nothing to do with the color of anybody’s skin. The only color that matters here is green,” Goldgar told Hughes. “That’s what the bank wants.”
Lloyd Hughes, the 70-year-old owner of Laundryworld, was in shock as U.S. Bankruptcy Judge A. Benjamin Goldgar ordered his business placed in Chapter 7 bankruptcy for liquidation. | Leslie Adkins / Sun-Times
Inland Bank and Trust is the bank in question, though Hughes never borrowed any money from Inland.
But in 2010 he received a $625,000 Small Business Administration loan through First Choice Bank in Geneva for a major remodeling of his facility.
First Choice failed, and Inland bought its loans and deposits in 2011 from the FDIC, including Hughes’ debt, which was in good standing at that point.
But Hughes said he began having trouble making the payments as business waned, so he sought to renegotiate the loan terms.
At first, Inland indicated an interest in doing so, Hughes said. But as the matter dragged on and Hughes fell behind, the bank moved to foreclose.
In a federal lawsuit filed in 2015, Hughes accused Inland of racially discriminating against him through intentional delays and failing to modify the loan. U.S. District Judge Matthew Kennelly ruled in the bank’s favor and dismissed the suit last month after Hughes’ lawyers withdrew from the case.
Last year, Hughes also filed for federal bankruptcy protection under Chapter 11, in hopes of negotiating better loan terms as part of a reorganization. The business has no other overdue debts.
But earlier this month Hughes ran afoul of the bankruptcy court by paying a repair bill for the laundry equipment without prior authorization.
As a result, Inland’s lawyers pressed Goldgar to convert the bankruptcy to Chapter 7, which will allow a trustee to sell off the company’s assets and loan collateral. That could include Hughes’ West Chesterfield home and the vacant home of his now-deceased parents.
John Redfield, Hughes’ lawyer, said the bank’s main interest is to collect on its SBA guarantee of about $480,000.
The irony is that Hughes might have had a better chance to renegotiate his loan if he hadn’t originally obtained it through the SBA.
There was further irony when I drove Hughes back to Laundryworld after the bankruptcy hearing.
At that very moment directly across the street, Gov. Bruce Rauner was holding a press conference to open Rev. Corey Brooks’ new Project HOOD Leadership and Economic Development Center in the former Walgreen’s.
Among the center’s purposes: to encourage minority entrepreneurship.
On Thursday, Laundryworld was closed, and entrepreneur Hughes desperately ran through scenarios that might allow him to reopen.
“This is 50 years of work,” he told me. “I’m not going to give it up without a fight.”
Unfortunately for him, there’s a bank that hasn’t been paid.
Lloyd Hughes: “This is 50 years of work. I’m not going to give it up without a fight.” | Leslie Adkins / Sun-Times
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