Art lovers throughout the state of California have probably been concerned for a few years now with the effect the economic downturn has had on live theater productions. When Americans have less money in their pockets, luxuries are usually the first things to be cut from the family budget. As a result, some theater companies have been forced to file for bankruptcy. The Willows Theatre Company was the latest, announcing on August 16 that they would be filing for Chapter 7 bankruptcy.
Though many would associate a Chapter 7 bankruptcy more frequently with individuals, it can be available for a company such as Willows as well. Chapter 7 is known as "liquidation" bankruptcy, mostly because the filer will list all of their non-exempt assets, after which the bankruptcy trustee will sell all they can to satisfy the filer's outstanding debts. Any remaining debt after that is forgiven.
The Willows Theatre Company was founded in 1977, and is currently in the midst of running a musical show called "Lucky Stiff." The run will end on October 7, and the company is offering patrons a ticket swap option to attend that show.
Although the decision to end a business can be a difficult one, any company that is facing ballooning deficits and expenses could consider Chapter 7 as the best decision in a bad situation. The filing will immediately put an end to all creditor efforts to collect on debt, and once the filer's assets are sold the entire process is basically over. Chapter 7 is usually the quickest bankruptcy process, so any company that is seriously considering a swift wrap-up of business affairs may find the Chapter 7 bankruptcy process to be the best option.
Source: MercuryNews.com, "Willows Theatre Company filing for bankruptcy," Lisa P. White, Aug. 16, 2012