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Tanned hides left in limbo after Chapter 7 filing

What if a business that processes or treats customers' possessions files for bankruptcy? For instance, what if a jewelry cleaning business or, in one recent case, a hide tannery has to close down? What happens to the jewelry or hides sent in by customers?

Business owners in Cleveland, Tennessee, may be interested in the bankruptcy story of Uber Tanning Co., the only company in the lower 48 states that offered tanning services for hides. Uber had a tanning history dating back over 100 years, but after new owners took over the business in 2006, the profits gradually diminished and bankruptcy became necessary.

Complicating matters is the fact that the owners, a husband and wife, filed for Chapter 7 bankruptcy -- liquidation bankruptcy -- and that led to the company closing its doors. The hundreds of customers who had sent in hides to be tanned were never informed of the company's financial troubles, and the hides were taken up by landlords and banks when the owners filed for bankruptcy. That left the hides in legal limbo.

According to the trustee appointed by the bankruptcy court, "Uber never owned the hides but had possession. They don't have possession anymore, so it's not really a matter for the bankruptcy court." That means any action that results in the hides' return must be arranged between the individual owners and the parties currently in possession of the hides.

Reportedly, a third party is working to return the hides to the customers, as well as inform the individual customers of the status of their hides.

This story underlines some of the business concerns associated with Chapter 7 bankruptcy. Tennessee business owners who are experiencing financial difficulties will want to be fully informed about which bankruptcy filing is right for them.

Source: Pioneer Press, "Uber Tanning is history; its hides might be saved," Dave Orrick, Sept. 14, 2012

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