Pre-settlement financing lender Files for Chapter 11 Bankruptcy in Florida

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Blackpoint Capital LLC, a Broward County-based pre-settlement financing lender, has filed for Chapter 11 reorganization in U.S. Bankruptcy Court in Fort Lauderdale. The filing, made on July 31, reflects significant financial distress for the Dania Beach company, which also operates under the name Blackpoint Funding LLC.

Financial Overview

The company’s bankruptcy petition reveals that Blackpoint Capital is facing $1.1 million in debt against $1.15 million in assets. The primary reason for seeking bankruptcy protection is pending litigation from multiple creditors. The firm’s largest creditor, Frank Zimmerman of Fort Lauderdale, is owed $347,000.

As of the bankruptcy filing, Blackpoint holds $54,200 in cash within a Chase business checking account, with the remainder of its assets listed as accounts receivable. All liabilities are categorized as unsecured claims, with several individual creditors, including Fort Lauderdale attorneys Alan Schlesinger and Warren Peebles. Schlesinger is owed $335,000, while Peebles is owed $200,000. Both attorneys had previously sued Blackpoint in Broward County Court over alleged unpaid principal loan amounts.

Bankruptcy Proceedings

Blackpoint Capital has been allowed to continue its business operations under debtor-in-possession financing, starting August 1. The company has also requested court approval to use cash collateral within two weeks of the petition date to maintain its operations during the reorganization process.

The company's recent financial performance shows it has generated $144,000 in revenue so far this year, with an annual revenue of $159,000 according to its case management summary. The bankruptcy filing could potentially impact ongoing lawsuits as Blackpoint has indicated that its bankruptcy could lead to a stay of these cases.

Statements and Reactions

Attorney Alan Schlesinger expressed his disappointment, stating, "It is truly unfortunate that this has happened to me and several other creditors. We hope that we will be made whole as soon as possible."

Legal counsel for Blackpoint Capital, Jason Slatkin, was not available for immediate comment. Warren Peebles, who is representing himself in his legal complaint, also could not be reached.

The outcome of the Chapter 11 reorganization will determine how Blackpoint Capital addresses its financial obligations and continues its operations amidst ongoing legal and financial challenges.