Whether large or small, many businesses must make the smart decision to shutter their operations when they are no longer viable. When liabilities outweigh assets and there is not a way to restructure the debt, it is prudent for a company to seek bankruptcy. Kentucky readers may be interested in a recent article written about a craft brewing company in the southeast which filed for Chapter 7 bankruptcy.
While there are many other forms of bankruptcy, such as Chapters 11, 12 and 13, Chapter 7 is general considered a "straight bankruptcy." This generally means that a filer comes out of bankruptcy proceedings without any further obligations on discharged debts. It is also described as a "liquidation" bankruptcy. There are, of course, always exceptions to this description, as there are in most all bankruptcy proceedings.
Triangle Brewing, which is based in North Carolina, filed for Chapter 7 bankruptcy recently. The company had over $400,000 in liabilities, which included approximately $70,000 due in taxes. The value of its assets was estimated at $226,000. The company began in the days when craft beers were just becoming popular, but was unfortunately unable to develop its brand and market share in a way that was sustainable for continued growth.
This is a common situation that many companies in Kentucky face when developing in emerging markets. Many times, one of the simplest ways to pay debts and discharge assets is through filing for Chapter 7 bankruptcy when it becomes unfeasible to continue business activities. Contacting an attorney experienced in bankruptcy law could assist a company in assessing the many options available to judiciously find the best way forward during difficult financial times.
Source: bizjournals.com, "Triangle Brewing to liquidate assets following Chapter 7 bankruptcy", Jason deBruyn, June 3, 2016