Our economy is a complex system that affects even simple business formats. Businesses of all shapes and sizes can thrive or fail depending on a wide variety of economic circumstances. When economic factors cause financial changes to a business, they have consequences for everyone involved, including owners, investors, customers, and employees. Failing businesses often have the greatest consequences to all parties involved in them, in addition to consequences to the economy as a whole. If you find yourself affected by a business filing bankruptcy in Fairmont, MN, Behm Law Group Ltd. offers guidance and counsel for those filing for Chapter 7, Chapter 13, and Chapter 12 cases.
If you are considering filing for a business bankruptcy, Behm attorneys can represent and support you throughout the case. However, we believe it’s important for all involved to understand how the prospect of a business bankruptcy will affect them. One recent example of how a business bankruptcy negatively affected parties involved more dramatically than the typical bankruptcy is the case of Colleen’s Consignment Stores in Las Vegas, NV.
In this case, the owner of the business may have created more detriment to creditors than would have been necessary. As small furniture consignment shop, Colleen’s Consignment Stores bought used furniture for resale. The company did not pay for the furniture bought from sellers within the weeks leading up to the company’s bankruptcy filing, and so those sellers became involved in the case as creditors.
The nature of this case caused much backlash from those who were involved unexpectedly as creditors and for the employees of the company who were given no warning of the bankruptcy. Some creditors were unaware of the bankruptcy until they were called to the required meeting of the creditors. Many were unsettled by the fact that their goods may be sold during the liquidation process and many were upset about the fact that the company bought furniture while potentially considering filing for bankruptcy.
In a nutshell, the effects of this bankruptcy case on the creditors were the following:
- An automatic stay was placed on their ability to collect payment for their furniture.
- They had to submit a proof of claim to retain any chance of receiving payment for their goods.
- Their goods would likely be sold in the liquidation process and they would not receive payment.
- They had to attend a meeting of creditors and sacrifice additional business and personal time throughout the case resolution.
Overall, this bankruptcy case had a less-than-favorable outcome for many creditors and employees involved with the consignment shop. However, this is an exception to the many bankruptcy cases that provide positive results for all parties involved. Bankruptcy is often an effective way to resolve debts for the filer and to provide some form of recompense for the creditors.
With the help of Behm Law Group, you can file a bankruptcy case that will steer away from issues such as those in the consignment store case and offer better results for all involved. To learn more about filing bankruptcy in Fairmont, MN, contact us today at (507) 387-7200.