Chapter 11 bankruptcy is designed to help struggling businesses become successful once more. A company that owns several restaurants in the Raleigh area recently filed for Chapter 11 bankruptcy protection. The restauranteur currently owns 4 restaurants in the area and used to own others. According to the court filing, the restaurant owner has assets totaling $1.1 million but owes $2.57 million in debts. Court records show that the restaurant owner owes money to a bank, a realty company and in taxes.
The restaurant owner noted the hospitality business has been difficult and margins have been small. In his statement he further noted that filing for Chapter 11 bankruptcy protection was necessary to protect employees, the investments of shareholders and the business operations. The restaurant owner also noted that the bankruptcy filing will not impact the current operations of his 4 restaurants in the Raleigh area.
Chapter 11 bankruptcy allows the business that has filed for Chapter 11 bankruptcy protection to reorganize its debts, negotiate terms on leases and existing debts and also raise capital rather than having to sell off all assets and liquidate the business. It allows the business the opportunity to repay debts and enjoy profitability once again. The restaurant owner noted future plans for success.
Chapter 11 reorganization bankruptcy protection allows a struggling business the opportunity to address its debt concerns and return to profitability. Because the process can be complex, but valuable, to many businesses facing overwhelming debt, it is helpful for business owners to understand the options available to them.