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.
Although it may seem as though the economy is starting to pick up, many companies still struggle with day-to-day business. Unemployment, credit card debt, divorce, college tuition and other factors can cause consumers to spend less. When this happens, businesses suffer. They lose profits and become unable to pay bills. The next step? Bankruptcy. While bankruptcy may seem like a bad word to some business owners, Chapter 11 bankruptcy - a type of bankruptcy for businesses - can actually help a struggling company stay afloat.
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?
To many Tennessee residents, nothing can seem more devastating than having to file for bankruptcy. However, bankruptcy no longer carries the stigma that it once did. Many individuals and companies have not only survived bankruptcy, but thrived from it. Entrepreneurs who are seeing their businesses quickly lose money may want to consider the benefits that a commercial bankruptcy can offer.
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.