It seems that the downturn in the economy is not only affecting the little guy, but also multi-millionaires as well. Recently, the head of Vandercar Holdings made the decision to file for Chapter 11 personal bankruptcy. Under Chapter 11 bankruptcy, the CEO will be able to partake in asset liquidation in order to repay any personal and business debts. However, the principal of Vandercar is still intending to build a movie theater and shopping center.
He has reportedly defaulted on two loans that he received from Huntington Bank that totaled over $38 million. It is claimed that the cause of the default is the current recession. Huntington Bank was then forced to foreclose on the property that the CEO personally guaranteed $38 million to buy. He reportedly also owes First Financial Bank more than $1.5 million on a mortgage for an old department store.
There is a flurry of discussion concerning the new theater and shopping center. Many are concerned that the commercial bankruptcy will delay or halt construction, but residents have been reassured that it is not an issue for the progress of the building. This is good news for Vandercar Holdings as well as the community because such a project would create much needed jobs for the area.
Bankruptcy is often looked at as an escape from debt, but it is something that should not be taken lightly. It is a complex issue, and individuals considering bankruptcy would be wise to consult an experienced attorney. Bankruptcy can offer some financial protection, but is not a get out of jail free card. Anyone who finds themselves in a financial situation where they have defaulted on their personal or business debts may want to consider bankruptcy. However, it is paramount that they discuss this with a knowledgeable attorney who is well-versed bankruptcy laws.
Source: Cincinnati.com, “Oakley Station principal files for bankruptcy,” Sept. 2, 2011