Many different factors can contribute to a company's decline in profits and accumulation of debts. When Louisiana owners find their businesses suffering from overwhelming debt, tough financial decisions must be made. Open-access workshop company TechShop recently made the choice to file for Chapter 7 bankruptcy.
Though Chapter 11 bankruptcy is the form most often associated with businesses, Chapter 7 is also a viable option for eliminating debts. Under this form, a company's non-exempt assets are liquidated in order to pay debts. While this does not typically allow the business to remain open to consumers, it does grant it the opportunity to rid itself of its debts.
One TechShop location reported monthly losses this year exceeding $30,000 and another reportedly struggled with operations several years ago. The company will be closing all 10 of its locations in the United States as part of the bankruptcy proceedings. Though the business will be closing its doors and liquidating its assets, it has plans to create a new nonprofit company to eventually take the old one's place.
Whatever type of financial struggle a business owner may face, he or she may benefit from speaking to an experienced Louisiana bankruptcy attorney to learn more about the various forms of bankruptcy and other options that may be available. An attorney could assess a company's financial situation to help determine the best course of action for the future, whether it be Chapter 7 bankruptcy, another form of bankruptcy or a different approach entirely. Additionally, an attorney could assist in any future related legal proceedings.
Source: post-gazette.com, "TechShop to close all U.S. locations immediately, filing Chapter 7 bankruptcy", Courtney Linder, Nov. 15, 2017