For many Americans, a business filing for bankruptcy signals the end — or at least the beginning of the end. But that’s not necessarily true. There are multiple types of bankruptcy, laying out several different strategies for businesses with financial struggles. While it’s true that Chapter 7 bankruptcy helps businesses liquidate debts and it does not allow much room for continuation of that particular business, Chapter 7 bankruptcy is just one of the options available. Chapter 11 bankruptcy is also a possibility, and it can have a very different outcome.
What is Chapter 11 bankruptcy? Any Chapter 11 bankruptcy attorney will tell you that this specific type of bankruptcy is a popular choice for businesses looking to restructure their debt. In many cases, owners and assets remain intact, although they are often under legal supervision. Businesses are also given the opportunity to stay in operation. And that’s exactly what Mike Barnaart, owner of Michigan’s Walldorf Brew Pub and Bistro, plans to do.
“Food is still coming out of the kitchen, the beer is still flowing, and the guests are still coming in,” Barnaart said in a statement to MLive. Barnaart adds that the first quarter of 2014 was actually a financial best for the company, and the pub is not struggling in the way people might think. Attracting guests and patrons is not the issue. Rather, Barnaart is battling with downtown Hastings, Mich. real estate values. Barnaart believes that, with no shortage of patrons and revenue, Walldorf Brew Pub and Bistro will press on. The pub owner filed for Chapter 11 bankruptcy on March 31.
Business owners can learn from Barnaart’s example. While people all over the U.S. dismiss bankruptcy as a “last resort” and a desperate measure for failing businesses, Barnaart and his pub demonstrate that bankruptcy can also serve as a means to navigate and reorganize debts.
This is a great source for more.