Cleveland TN Bankruptcy Law Blog

There is a wide-reaching effect on employees, board members, owners and customers when a company decides to go bankrupt. When a business declares bankruptcy, there are a variety of side-effects that impact people associated with the company. Customers lose confidence in the product, business owners must recompose themselves financially and employees of the company can watch years of savings disappear.

Kodak's bankruptcy has been met with dismay from employees. Most of them invested in the 401(k) retirement plans offered by the company for years, and one of the ways they invested was through stock in the company. That stock - once valued at $31 per share - has plummeted to 35 cents per share, and as its worth has gone out the window, so have the retirement plans of many Kodak employees.

Tennessee has had one of the highest personal bankruptcy rates in the country, and that trend did not change in 2011. According to a Columbia law professor who analyzed the 2011 national bankruptcy rate, Tennessee has the 4th most personal bankruptcy filings in the U.S. behind only Nevada, Georgia and Utah.

Some good news did accompany the professor's research, as the national personal bankruptcy filings dropped 12% last year when compared to 2010, making this drop the first year-to-year decline since 2006. The analysis estimates that one in every 175 Americans filed for bankruptcy in 2011, about 1.35 million people.

Business bankruptcy is not always solely about debt. Sometimes companies see bankruptcy as an opportunity to solve their financial issues, while planning for future profits. Those affected may see business bankruptcy as a means of achieving success.

One Tennessee energy company recently filed for Chapter 11 bankruptcy protection. At the same time, they have indicated that a Chinese company is prepared to invest $6 million in exchange for a 30 percent stake in the financially troubled company.

The troubled economy continues to affect many people in Tennessee and in other places all across the country. In October, more than 75,000 homes nationwide were sold in foreclosure. In Tennessee alone, more than 2,500 homes were in foreclosure, but it appears that help is on the way for some homeowners struggling to make their monthly mortgage payments.

One town in Tennessee has created a foreclosure prevention task force to provide homeowners with counseling services to help them find ways to pay their mortgages. The task force has also helped struggling homeowners connect with programs intended to help them pay off their home loans.