Business & Commercial Bankruptcy Archives

What is an Involuntary Bankruptcy

An Involuntary Bankruptcy is filed not by the individual or company that has the debts, but instead by creditors of that individual or company. The involuntary bankruptcy can either be a Chapter 7 or Chapter 11 bankruptcy. Three creditors with combined claims totaling $15,775 or more can force a company into bankruptcy. The claims cannot be contingent or subject to a bona fide dispute. The filing must be in good faith or the case will be dismissed and the creditors could be responsible for fees and costs incurred by the debtor. The requesting parties must show the debtor is not paying its debts as the debts become due. Creditors will file an Involuntary Bankruptcy for various reasons including trying to force liquidation of the assets to pay its claims or to get the trustee appointed to review the books and records to make sure the debtor is not improperly favoring some creditors over other creditors.

GYMBOREE APPEARS TO BE ON VERGE OF BANKRUPTCY

Gymboree appears to be on the verge of bankruptcy according to The Denver Post. http://www.denverpost.com/2017/05/05/gymboree-stores-closing/ A number of stores will likely close as part of the bankruptcy process. A number of brick and mortar retailers have struggled in recent years. According to the Gymboree website, southern New Jersey has stores in Cherry Hill, Deptford, Marlton and Blackwood NJ. There are also stores in Philadelphia Pennsylvania. It is not yet clear which stores will be closing.

Bankruptcy Court Approves Circus Sale

As reported by the New York Times, Big Apple Circus, which began operating in 1977, filed bankruptcy and closed in the summer of 2016. A 1.3 million dollar bid by Big Top Works to buy the debtor's assets was recently approved by the Bankruptcy Court. The circus will return in the fall of 2017. Prior to filing, a fund raising drive was used in an attempt to keep the circus going, but it fell short of its needed goals. http://www.vivacityny.com/new-york-times-big-apple-circus-sold-to-the-highest-bidder-will-return-this-fall-the-new-york-times/

Conversion of Chapter 11 business bankruptcy to Chapter 7 bankruptcy

When a business is struggling, often it will turn to a Chapter 11 bankruptcy in order to reorganize its debts. Through Chapter 11 a business can often reduce unsecured debts like claims of suppliers, restructure secured debt and pay priority tax debts over time, among other things. Often these changes are enough to allow the business to again be successful. But sometimes, for various reasons, it is not enough. What happens then? One possibility is the case is dismissed. Another possibility is the case is converted to Chapter 7. In that case, a trustee will sell the assets to the highest bidder. This is exemplified by the South Jersey bankruptcy of Geets Diner in Williamstown New Jersey. The restaurant had filed Chapter 11 in 2015. In August 2016 the case converted to a Chapter 7 bankruptcy. In January 2017 the assets, which included the land, building, equipment and liquor license were sold to the highest bidder. The restaurant will now be reopened by the new owners and the proceeds from the sale will be used to pay creditors of the debtor.

Cherry Hill Restaurant Files Chapter 7 Bankruptcy

Kuzina by Sofia has shut its doors after seeking Chapter 7 bankruptcy protection, according to the Courier Post, http://www.courierpostonline.com/story/news/local/south-jersey/2016/09/08/kuzina-restaurant-close-cherryhill/90094302/

Kuzina by Sophia Restaurant (located on Rt 70 in Cherry Hill) Files for Bankruptcy

"We're sorry to be out of the business, but in a way we're still in the business," said Khoury, who said the catering firm, Cooking With Sofia, will serve individual customers and also hold dining events for the public. "We want to thank everyone for being our customers all those years." Kuzina by Sofia (located on Route 70 in Cherry Hill) sought Chapter 11 bankruptcy protection in February to restructure its finances, however a trustee moved on July 28 to convert the case to Chapter 7, allowing the firm's liquidation.

Aeropostale Chapter 11 Bankruptcy Closes Pennsylvania Stores

The Wall Street Journal, at wsj.com/articles/aeropostale-files-for-bankruptcy-protection-1462339757 , reports that Aeropostale filed for Chapter 11 bankruptcy protection Weds 5/4/2016 against private-equity firm Sycamore Partner, which controls both its largest lender and one of its largest suppliers. In Wednesday's court filings, Aeropostale indicated they suspect Sycamore took actions intended  to force Aeropostale into bankruptcy. A Sycamore spokesman denied "engaging in any such conduct, as it would be counterproductive" to the firm's "significant financial investment" in Aeropostale. Sycamore also has attempted to block Aeropostale's bankruptcy loan with Crystal Financial, and has called Aeropostale a "financial disappointment of epic proportion."

Power company files 10th largest Chapter 11 business bankruptcy

A large power company called Energy Future Holdings has filed for bankruptcy. The business bankruptcy filing comes seven years after the energy company went through a leveraged buyout, which left it laden with debt. The buyout happened before the natural gas boom in the United States resulted in a large-scale reduction of electricity prices. These shifting economic forces affected business operations across New Jersey and the rest of the nation.

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