In the past, many in Kentucky may have considered filing for bankruptcy protection to be the end of the road for a company. However, in recent years, more and more companies have started to look at filing Chapter 11 as a way to rid themselves of unprofitable holdings and emerge healthy and viable. Recently, Last Call Guarantor LLC, a chain that includes the brands Fox & Hound, Bailey's Sports Grille and Champps, became the fourth such company to file for bankruptcy this year.
The decision to file for Chapter 11 came after the chain faced a competitive landscape that suffered from over-expansion. As the economy has healed, the restaurant industry experienced a sharp increase in new restaurant openings over the past few years. Last Call found its business at a point at which it had assets of $10 million to $50 million and debts between $100 million and $500 million.
When faced with this difference, many companies choose to try to raise assets by increasing prices. However, experts caution that this method can become a "death spiral," which can hasten a company's demise. Though Last Call has filed for bankruptcy protection before, this latest filing may be a way for the company to restructure and get back onto a financially healthy path.
The decision to file for Chapter 11 bankruptcy can be a difficult one for many companies in Kentucky. However, it can also be a way for a company who is in debt to make a fresh start when faced with severe financial challenges. No matter what circumstances a business is facing, it may be beneficial to speak with an attorney whose practice focuses on bankruptcy law. An attorney will be able to evaluate a client's unique financial situation and discuss the various forms of bankruptcy or debt relief that are available.
Source: wfaa.org, "Why a Dallas restaurant company's bankruptcy is part of a trend", Korri Kezar, Aug. 10, 2016