Starting their own businesses is a dream that many people have. Of course, this dream can hit many bumps along the way, and even if individuals do manage to get their companies off the ground, they may end up facing financial struggles that put their businesses at risk. For many, the way to address this type of situation is Chapter 11 bankruptcy.
Part of the bankruptcy process involves presenting a repayment plan to the court and having it approved in order to move forward with the process. It was recently reported that a repayment plan for a Louisiana restaurant chain was approved by the bankruptcy court. Apparently, the owner of the company had filed for Chapter 11 earlier this year. In total, their outstanding liabilities exceeded $846,000, and approximately $248,000 of that amount was unsecured debt owed to smaller creditors.
As part of the approved plan, an equity investor will take the company's debts and start repaying creditors. It was also noted that the smaller creditors would likely only obtain approximately 1 to 2 percent of the owed balances. The report stated that the business owner will relinquish ownership and stake in the company, and the investor group will take over as owner while the restaurants remain open.
For many people, keeping company doors open is a goal when financial troubles are prominent. If other Louisiana businesses are struggling with outstanding debts, they may want to consider Chapter 11 as a possible relief option. Having their cases evaluated by knowledgeable attorneys may help interested parties determine whether this route could work in their best interests.