Yellow Cab Owner Files For bankruptcy Following $26 Million Verdict

Yellow Cab Owner Files For bankruptcy Following $26 Million Verdict

Yellow Cab presents itself as the oldest and largest taxi cab company in North America, according to WLS. While its drivers are all independent contractors, the court system found the company liable for a tollway accident that took place a decade ago.

The day after the Cook County jury verdict, which totaled $25.9 million and was handed down on the evening of March 17, The Yellow Cab Company filed for Chapter 11 bankruptcy. The cab operator’s president has stated his company’s liabilities surpass its assets following the verdict.

Auto accident

The jury made this decision after finding the driver at fault in the high-speed crash, in which the taxi cab entered a drainage area after careening out of control when exiting southbound I-294 at Ogden Avenue, according to Chicago Tribune. The vehicle next flew through the air, before colliding with a concrete barrier.

Before the incident, Marc Jacobs worked as a real estate partner at Barack Ferrazzano Kirschbaum & Nagelberg, the media outlet reported. However, his lawyers have claimed that because of the accident, the plaintiff has suffered permanent brain damage and memory loss after a car accident that has left him incapable of working at the same level as before, even after undergoing surgeries and rehabilitation.

Lawsuit filing

In the aftermath of this event, Jacobs filed a lawsuit naming cab driver Cornelus Ezeagu as a defendant, claiming negligence, according to the news source. In addition, the legal action named Yellow Cab Affiliation Inc. and Matthew Ezeagu, who owned the vehicle, as defendants.

The plaintiff hired Robert Clifford, founder and senior partner at Clifford Law Offices, as well as Timothy Tomasik, who founded Tomasik Kotin & Kasserman and now serves as a partner at the firm.

After a two-week trial, the jury, which deliberated before Cook County Circuit Court Judge Daniel Lynch at the Daley Center, decided in favor of awarding almost $25 million in damages to Jacobs and another $4.5 million to his wife, Deborah Jacobs, for loss of consortium. Over the last decade, she has been his primary caretaker.

Fate of verdict

Because of the plaintiff’s negligence, these amounts were lowered by 12 percent to $22 million and $4 million. However, because The Yellow Cab company filed for Chapter 11 bankruptcy, how much of the verdict Marc and Deborah Jacobs will receive is uncertain, Clifford told the Chicago Tribune.

Companies frequently seek this protection from creditors if they are granted a large judgment by the court system, because taking this legal action protects their assets from seizure by the plaintiff while an appeal is pending, Robert Fishman, founder of Chicago bankruptcy law firm Shaw Fishman, told Crain’s Chicago Business.

The Yellow Cab stated in bankruptcy documents that it has assets worth between $1 million and $10 million, the media outlet reported. In addition, these papers failed to state whether any secured creditors have claims against the cab operator’s assets, according to Chicago Tribune.

At least for now, the married couple is unable to collect on the award until the court system resolves the bankruptcy situation, Douglas Baird, a bankruptcy expert at the University of Chicago Law School, told the news source.

Appeal planned

Following the legal decision, Yellow Cab has indicated it plans to appeal the verdict and continue to operate its taxis during its Chapter 11 bankruptcy proceedings, according to WLS.