Most may assume that a Chapter 7 bankruptcy is something only individuals seek. The common assumption may then be that when businesses in Tennessee file for bankruptcy, they instead choose to file under Chapter 11. There may be logic in this line of thinking; after all, a Chapter 11 bankruptcy allows a company to reorganize is management structure and present a new plan to its creditors that details its road back to success. Yet in those cases where a company’s leadership may not have any plans to stay in business, then the potential of having some of the company’s business debts discharged through a Chapter 7 filing might be more attractive.
Anyone that operates a business may know exactly how fast it can accrue debt. That is exactly what a now-defunct restaurant and bar in Louisiana is facing. It opened to great fanfare on 2013, offering patrons high-end beers whiskeys. Yet its revenue had been on a steady decline over the last couple of years. Not even introducing a full restaurant menu late last year was able to slow its financial freefall. Currently its owners list only $265 in assets compared to over $212,000 in liabilities. After closing their establishment’s doors earlier this year, the ownership group has now filed for Chapter 7 bankruptcy.
Oftentimes, market trends might tell a business owner that a financial recovery just might not be in the cards (as appeared to be the case in this story). Facing such a possibility, one might see why a business owner would then opt for a Chapter 7 filing. Such a decision is no doubt a difficult one, and one that one may only want to make after having first consulted with an experienced bankruptcy attorney.