Many restaurant owners in Tennessee and throughout the country have said that the past year has been economically challenging for their businesses. One restaurant owner, in particular, stated that income reductions and waiving franchise fees were simply not enough to help the business make it through its current financial crisis. Thankfully, the company was able to file a petition for Chapter 11 bankruptcy to keep from becoming insolvent.
Liabilities currently outweigh assets
The restaurant in question specializes in featuring seafood and gumbo that has a “New Orleans flare.” The company was founded in another state in 2010 and has since expanded to 25 separate establishments. Owners decided to declare the Tennessee location bankrupt in light of the fact that current assets are valued just over $330,000 while liabilities exceed $1 million.
Bankruptcy often helps businesses through rough financial times
There are several types of bankruptcy available to eligible business owners or individuals. In this case, restaurant owners are using the Chapter 11 program, which typically provides a means to reorganize a financial structure so that creditors are paid while the business is able to stay alive. Depending on specific circumstances, this type of bankruptcy may be voluntarily petitioned or ordered by the court in answer to a petition filed by creditors.
Business owners can explore numerous options
Tennessee business owners will be glad to know that most financial crises are temporary. Filing for bankruptcy is often an option that can provide immediate debt relief while laying the groundwork for a stronger financial future. Each type of bankruptcy carries its own eligibility requirements. If a business owner does not qualify for one type of bankruptcy, it is possible that another option may be available to fit the company’s needs.