A businessman has filed for a personal Chapter 11 bankruptcy after losing money during the recent economic downturn, a situation familiar to many in New Jersey. The businessman is the president of a company that controls interest in apartment buildings across the nation. The man asserts in his Chapter 11 bankruptcy that, since 1991, he has been a part of the purchase of at least 125 apartment communities in 20 different states.
The personal Chapter 11 filing came after the man and his businesses were the subject of lawsuits regarding the apartment buildings. In one such suit, an investment firm was awarded a total of $5.4 million after asserting that the man used insurance money intended to repair apartments for his own personal use. The insurance money was apparently paid to the man after the buildings were damaged by Hurricane Ike in 2008.
In the bankruptcy filing, the businessman listed only one creditor, the firm that had recently won the lawsuit against him. His assets were divulged to the court, though no details about their exact value have been made public. The court will review all submitted documents, as is similar in such cases in New Jersey, in order to determine how much the creditor will be repaid.
With a Chapter 11 bankruptcy, a person who files may find that they have time to work toward a plan for their financial future. This plan may include a restructuring of debts and efforts to become more profitable. The bankruptcy rules are intended to assist a person who has a large amount of debt with repaying what they can and, afterward, beginning anew.
Source: Puget Sound Business Journal, “Tacoma businessman behind apartment deals seeks bankruptcy protection,” Greg Lamm, Oct. 18, 2012