The phenomenal growth of ride share services such as Uber and Lyft has had a serious impact on the taxi industry in New York City. Even the so-called "Taxi King" of New York, Gene Friedman, has seen the collapse of his empire.
Freidman, who owned more medallion taxis (830) than anyone else in the city, filed for Chapter 11 bankruptcy back in 2015. However, the bankruptcy court changed the case to a Chapter 7 last September, citing that Friedman hadn't produced a viable reorganization plan as required.
That same month, he lost his office space in Manhattan when he failed to pay his rent on time. Earlier in the year, he was ordered to pay $250,000 in damages and fines by the state attorney general's office for not paying his drivers in a timely manner for credit card fares and not keeping accurate records of his receipts.
Now Friedman is facing jail time for refusing to turn over 46 of his vehicles to the Chapter 7 trustee. If he fails to do so, he may face arrest for contempt of court, according to the judge. "I am not kidding about this," she said.
Friedman has said that he wants instead to hand them over to New York's Taxi & Limousine Commission. The judge said this isn't his decision to make. They need to be sold off as assets to pay the bankruptcy estate. He has claimed that he doesn't own some of them, that some have already been repossessed and that still others don't work. The trustee has disputed those claims.
Many bankruptcies aren't this dramatic or conflict-ridden, and most don't end up with the person filing for bankruptcy in jail. If you have an experienced bankruptcy attorney, it's important to listen to him or her and to take all orders of the court and the trustee seriously.
Source: The Street, "Gene Freidman Could Get Ride to Jail in Taxi Turnover Flap," Ian Wenik, Jan. 12, 2017