Many Tennessee residents dream of escaping the corporate world and starting their own business. Nothing, they assume, could be more satisfying that working for yourself. While some entrepreneurs are able to create, grow and maintain successful businesses, the reality is that many fail in the first year. Running a business is a costly endeavor, and coupled with extreme competition, many companies are poised for failure. Bills pile up, and before you know it, you're drowning in debt. Fortunately, there may be a solution for your overwhelming debt.
Many Tennessee businesses flourish while others, for some reason, fail to generate enough revenue to survive. When this happens, entrepreneurs can generally choose from three main types of bankruptcy: Chapter 7, 11 and 13. Each has its pros and cons, but many experts believe that Chapter 11 should be a last resort - after other strategies have failed. Learn more about why companies should hold off on using Chapter 11 as a business bankruptcy.
Sometimes businesses grow quickly and experience phenomenal business results for a long time, and then start to lose money and customers as other companies pop up. Unfortunately, even a higher power couldn't save popular religious chain Family Christian Stores from filing for Chapter 11 bankruptcy. The company, which has stores in Tennessee and 35 other states, experienced a major decrease in cash flow starting six years ago, after the recession hit.
Tennessee consumers generally have two main options for filing for bankruptcy: Chapter 7 and Chapter 13. What many do not know, however, is that there is another option, but it is used quite rarely. Chapter 11 is generally reserved for a business bankruptcy, but individuals can use it in certain situations.
Many Tennessee entrepreneurs are able to sustain their businesses for a few years before the novelty wears off and they start losing customers. Consumers are always looking for the next big thing, so when they stop buying a particular product, companies start losing money. Of course, it's common for companies to have their ups and downs during the course of the business. But when business drops steadily - with very little chance of becoming profitable again - a business bankruptcy may be the only option. But is this option only for large corporations or can start-ups and small businesses benefit from Chapter 11 bankruptcy as well?
How would Tennessee college students feel if their school suddenly closed? That is the news that thousands of students across the country recently heard when for-profit Anthem Education filed for business bankruptcy in late August. The college and career institute chain had 41 campuses before bankruptcy filing and hopes to keep 28 of them in operation. However, the campuses are no longer eligible for federal student aid, which accounts for 90 percent of their revenues.
Tennessee movie fans may be astounded at how much money goes into creating the blockbuster movies they see in the theaters. It can cost tens - even hundreds - of millions of dollars to create a quality film. This may lead ordinary people to believe that Hollywood is chock-full of money, but some studios struggle financially. The latest case involves Soundelux, a leading provider of post-production sound. The studio recently filed for business bankruptcy.
When a Tennessee business has accumulated billions of dollars in debt, bankruptcy is only inevitable. Even a debt restructuring could cost tens or hundreds of millions of dollars - a large sum of money for even the most successful business. According to recent reports, Dallas-based Energy Future Holdings is in serious financial trouble as revenues decline and debt increases.
According to the government, the sale of the nation's oldest privately owned clothing maker, now bankrupt, may be happening too quickly and may not be in the best interests of the bankrupt company's creditors. The clothing company has been making tailored suits and clothing in Cleveland, Tennessee since 1880. The privately owned company is currently operating under bankruptcy court supervision. The company hopes to emerge from bankruptcy after a proposed $2 million sale to a local Cleveland millionaire who says he wants to rebuild the business and save Cleveland's oldest company.
Sometimes companies fall onto hard times and end up with large amounts of debt. But hard times do not always signal the end for a company. Sometimes bankruptcy can help the company restructure its business and create new long-term goals. That is what Tennessee medical transcription company M*Modal is hoping to accomplish after filing for Chapter 11 bankruptcy.