When the decision makers at a company decide to file for Chapter 11 bankruptcy protection, the decision is often made only after a string of bad years, coupled with every effort to turn things around. For the well-known electronics company RadioShack, that certainly appears to be the case.
Many of our Escondido readers are probably familiar with the teen-oriented clothing retail chain known as "Wet Seal." There are several Wet Seal locations throughout the local area, and the company is actually based out of Orange County. But, it appears that this company, which has retail locations throughout the country, is facing some serious financial difficulties. As a result, the company recently filed for Chapter 11 bankruptcy.
Many of our Escondido readers know from seeing previous posts here that Chapter 11 bankruptcy is an option for businesses that want to turn around a financial situation that is getting out of hand. Chapter 11 is known as "reorganization" bankruptcy. Our readers also probably know that the bankruptcy process can be long and complicated. But what are the key steps in a Chapter 11 bankruptcy filing?
Personal debt is quite a bit different than business debt. For most individuals, Chapter 7 bankruptcy is the best solution for dealing with burdensome debt, because this process allows the filer to wipe out most debts and start from scratch. But, the perceived negative aspects of a Chapter 7 bankruptcy, like taking a hit on a credit score and losing assets, may not part of the solution for businesses. Businesses are oftentimes in a bit of a better position to correct their financial problems, and that is why many businesses go through the Chapter 11 bankruptcy process.
It is only natural for Escondido residents who are contemplating a bankruptcy filing to have quite a few questions about the process. After all, it is common knowledge that filing for bankruptcy is one of the most significant financial moves an individual or business will make, so it makes sense that every question should be answered before the filing proceeds. One of the most common questions is, "What is the difference between secured debt and unsecured debt?"
It is no secret that the American economy has gone through some trials and tribulations over the last several years. The economic recession was one thing, but with the proliferation of Internet use for shopping and other changing consumer trends, many business owners may find it hard to predict where the next profitable path forward may be. And, in some instances, changing economic trends and conditions can leave some companies with no other choice but to pursue a bankruptcy filing.
Some of our Escondido readers may be familiar with the restaurant known as Elephant Bar, a popular California-based chain that specializes in internationally inspired dishes. But, fans may have a harder time finding a location where the restaurant is still in operation these days, after the company that runs the restaurant filed for Chapter 11 bankruptcy on June 16 and closed 16 locations.
Many of our Escondido readers probably like to hear success stories, and the recent emergence from Chapter 11 bankruptcy for one California company definitely qualifies. The company, a popular Mexican grocery store chain called "Mi Pueblo," was founded in 1991 and has several stores in a few different locations in California. Last year, however, even despite the rising popularity and demand for Mexican food items, the company hit a low point.
California is home to Hollywood, and as such our state probably has more companies involved in the production of movies and television shows than any other. However, even those companies that have experienced relative success in the past may not always be able to keep the profits churning, and that appears to be the case for one company that has locations in both Santa Monica and Hollywood.
Many companies that file for business bankruptcy may not get to experience what it is like to come out the other side of the process in better financial shape than they went in. If a business owner chooses to pursue a Chapter 7 bankruptcy, that will usually mean that the company plans to close down after any and all assets are sold off to satisfy debts. However, when a company goes through a Chapter 11 bankruptcy filing, many times the company is able to emerge once the process is completed and carry on with business.