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business bankruptcy Archives

Takata bankruptcy reduces funds for air bag liability claims

Takata Corp. manufactures automotive airbags, and its products can be found in thousands of cars in Kentucky. Unfortunately, Takata's products suffer from a serious design defect, and the liability claims and fraudulent cover up have now forced the Japanese company to seek the protection of the bankruptcy court. This case provides a case study of how a business bankruptcy can eliminate or sharply reduce the amount of money available to pay liability claims.

Online selling forcing many retailers into bankruptcy

The increasing popularity of on-line selling by firms such as Amazon and others is having a severe adverse effect on traditional retailers in Kentucky and elsewhere. This effect has been recently demonstrated by the number of retailers filing for Chapter 11 protection from their creditors.

Understanding the meaning of "debtor in possession"

The United States Bankruptcy Code contains many terms that are unique and not always easy to understand. One of the key terms in any business bankruptcy is "debtor in possession." When a Kentucky business makes the decision to file a petition in bankruptcy, it must choose from several different types of proceedings, including complete liquidation, reorganization of debts and continued operations and submitting to the oversight of a court-appointed trustee. A business that decides to keep operating while reorganizing its finances often becomes a "debtor in possession."

What is a "small business bankruptcy"?

Many of the Kentucky businesses that file bankruptcy petitions under Chapter 11 of the Bankruptcy Code are colloquially known as "small businesses." Some of these small businesses are so small that they are governed by a separate provision of the Bankruptcy Code known as the "small business bankruptcy."

The role of the creditors' committee in a Chapter 11 bankruptcy

Most Kentucky businesses contemplating filing a petition for a Chapter 11 bankruptcy understand that control of the business will be subjected to the control of the court. But few understand exactly how this happens. This blog has previously commented on the role of the bankruptcy trustee in a Chapter 11 proceeding. This post will examine the role of the creditors' committee.

Lawsuits force cancer clinic network to file Chapter 11 petition

Many people in Kentucky have used the services of 21st Century Oncology, a large cancer treatment network concentrated in southeastern states. Following years of declining revenue and the settlement of several lawsuits, the company recently filed a petition for bankruptcy under Chapter 11.

E. coli outbreak leads to bankruptcy of soy butter manufacturer

Many factors can force a person or business into bankruptcy. A recent Chapter 7 filing involving a Kentucky-based food manufacturer highlights this fact and provides a devastating irony: the seller of a peanut-free peanut butter called "I. M. Healthy" has been forced to file a business bankruptcy under Chapter 7 because its product has been found to be contaminated with the bacillus E. coli

Understanding executory contracts in bankruptcy

Many Kentucky businesses that file a petition for bankruptcy are often party to one or more contracts under which the parties have not fulfilled all of their obligations. A common example is a commercial lease whose term has not expired. In such a situation, the debtor must continue to pay rent, and the landlord must continue to allow the debtor to occupy the space. What happens to these contracts in a business bankruptcy proceeding?

Two Louisville restaurants may be closed by bankruptcy

Two popular Louisville area restaurants may be forced to close their doors if, as has been whispered, their parent corporation decides to declare bankruptcy. The irony of the situation is the fact that both local restaurants appear to be doing well financially.

What is a pre-petition waiver and how does it work?

Bankruptcy can become a significant stigma for small businesses in Kentucky and their owners. Bankruptcy is often viewed as the "nuclear option" to be used only after other attempts at keeping a business solvent have failed. However, even businesses that are deeply in debt may be able to avoid bankruptcy by negotiating agreements to restructure their debts instead of filing a bankruptcy petition.

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