For many companies, facing a business bankruptcy is one of their biggest fears. Not only is bankruptcy distressing and emotionally exhausting for the company and its employees, but it is also sometimes a murky process with no clear end in sight. When an Tennessee company faces a business bankruptcy, an experienced attorney may be able to help navigate the intimidating and confusing maze of the federal Bankruptcy Code.
A cabinet maker, Cabinet Enterprises LLC doing business as Knapke Cabinets, filed for Chapter 11 bankruptcy in a U.S. court earlier this month. The company had actually acquired Knapke Cabinets through an Article 9 Uniform Commercial Code sale in February. An Article 9 sale is a way to transfer ownership of a distressed company.
Presumably, the acquisition of Knapke is what caused Cabinet Enterprises to file for bankruptcy relief. The company claims that it had lost a net total of $327,757 in only seven months. However, because the company filed for Chapter 11 protection, it will still be able to conduct business without losing ownership unless a judge rules otherwise.
Chapter 11 is a way for a business to reorganize its finances without having to worry about the threat of creditors’ lawsuits while the bankruptcy trustee and creditors consider the financial plan offered by the company. The resulting reorganization plan will need to be accepted by a majority of creditors before it can go into effect.
It is too soon to tell whether Cabinet Enterprises will emerge successfully from Chapter 11 as a leaner and more efficient company, but bankruptcy offers the company a chance to start anew that it may not have had otherwise. For companies considering business bankruptcy or having difficulty with debt management, a bankruptcy attorney may prove to be of invaluable assistance. The attorney may be able to help with assessing the state of the company’s finances and assist in devising a plan in the company’s best interests for a return to financial health.
Source: The Dayton Daily News, “Cabinet company seeks bankruptcy protection,” Ben Sutherly, Oct. 4, 2011