Those who run small businesses in Greensburg likely have lofty expectations of success during their initial days in operation. However, no company is immune to financial struggles at any point during its lifecycle. Should a small business accumulate enough liabilities that bankruptcy begins to seem like a viable debt relief option, the hope may still remain that it will be able to continue operating. With a Chapter 11 bankruptcy case, a business owner or ownership group can present a reorganization plan to both the court and its creditors that, if approved, would allow the company to survive. Yet business owners who start out with that goal in mind may not always end up achieving it.
Such appears to be the case with an ownership group in North Carolina that recently petitioned to have its Chapter 11 filing converted over into a Chapter 7. The initial move was made with the intention of keeping the restaurant that it owned open. The eatery, which has ceased its operations, had been open since 2015. Its owners listed assets of around $50,000 or less compared to business liabilities of up to $1 million.
In a Chapter 7 bankruptcy, certain non-exempt assets may be sold to repay creditors. Losing these assets often spells the end of a company. There may, however, be certain advantages to a small business owner filing for Chapter 7. He or she may be allowed to retain his or her business equipment thanks to bankruptcy exemptions. This may allow him or her to establish another business after reestablishing him or herself on firm financial footing. Regardless of whether a small business owner wants to seek Chapter 7 or Chapter 11 bankruptcy protection, he or she may want to consult with an attorney prior to making any decisions.
Source: Triangle Business Journal “Kamado Grille closes, looks to convert bankruptcy to Chapter 7” Henderson, Jennifer, Mar. 02, 2017