Chapter 11 bankruptcy protection provides businesses with an opportunity to stop, restructure and repair problems that are threatening the company's financial health. It can mean the difference between saving the company and having to shutter the doors.
That doesn't mean it's easy, however. The story of a Tennessee restaurant helps illustrate one of the painful aspects of Chapter 11.
Ryan's Restaurant in Greeneville was a popular local restaurant and meeting place for many local civic groups. Recently, however, the restaurant's management said the doors were closing for good and that the eatery's equipment and that they had hired an auctioneer to sell off all the restaurant's inventory within the next few days. Employees had no warning of the impending closing, and many did not learn of the closing until the day it was announced.
Ryan's is owned by Buffetts, LLC, a Texas firm that petitioned for Chapter 11 protection in 2016 with assets of $50 million and debts of $100 million. The firm has been restructuring its debts and closing its weaker restaurants during the last two years. Ryan's was a victim of the restructuring. An executive with the auction firm said that while many stores announce their closing well in advance, restaurants typically wait until the last minute.
It's always sad when a beloved local restaurant closes, community groups lose their meeting place and employees lose their jobs, but it can be worse when a large restaurant firm closes, forcing multiple restaurants in different cities to go out of business.
Oftentimes, Chapter 11 is the best way to save a company and its employees. If your business needs help getting out of a debt problem, contact a skilled debt relief attorney.