Can Los Angeles Businesses File for Chapter 7 Bankruptcy Regardless of Size or Business Structure?
With the approval of the bankruptcy court, any business can file for Chapter 7 bankruptcy in Los Angeles or across the United States. And while business size and structure certainly affect the relative complexities behind a Chapter 7 filing, the overall principles and processes of liquidating any business are the basically the same.
At one end of the scale, owners of sole proprietorships seeking liquidation can often file for personal Chapter 7 bankruptcy. However, even very large corporations can seek liquidation under Chapter 7 bankruptcy. Perhaps one of the more notorious recent filings is the liquidation of Hostess Brands Inc. As reported by ABC News, the bankruptcy courts approved the plans for liquidation in November 2012, after mediation with the bakers union failed to resolve serious issues. The court approval resulted in the immediate layoff of approximately 15,300 workers, even as the company retained over 3,000 employees to assist with the initial phase of the wind-down that is projected to take about a year.
The process and complexity of liquidating under Chapter 7 business bankruptcy can vary dramatically based on the size of a business. For small businesses, it may typically involve selling the basic business assets and inventory to generate funds to partially repay outstanding debt. However, the assets of large, well-known companies often include brands and other intangible items. In fact, the news of the Hostess Brands Inc. liquidation generated interest from several organizations that wanted to purchase the company due to the popularity of its iconic brands.
Making the decision to file any form of business bankruptcy requires seeking legal counsel from an attorney with extensive experience identifying all available legal options. The Law Offices of Michael Jay Berger works closely with small and medium-sized businesses to identify their goals and determine if they need to liquidate — or if they can save their businesses through other bankruptcy options.